Merger Arbitrage Mondays – Prevail Therapeutics Deal Closes In A Record 38 Days

Merger activity decreased last week with one new deal announced and four deals completed.

Founded in 1966 and headquartered in Santa Clara, California, Coherent is a photonics manufacturer that provides laser-based technologies and laser-based system solutions in a broad range of commercial, industrial and scientific applications. On January 19, Lumentum Holdings (LITE) agreed to buy Coherent (COHR) for $5.7 billion, in a cash plus stock deal.

Another highlight from last week was a deal amendment. Collectors Universe (CLCT) and Nat Turner, D1 Capital Partners and Cohen Private Ventures entered into an amendment in which the investor group increased its offer to acquire CLCT, from $75.25 per share to $92.00 per share in cash.

You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

There were two new deals announced in the Deals in the Works section last week.

SPAC Arbitrage

There were 14 new IPOs filed last week and 1 new SPAC business combination announced. An astounding 68 SPACs have gone public in just the first three weeks of this year. This compares with just one SPAC IPO last January. You can find the new SPAC IPO announcements in our new SPACs tool here.

  1. On January 22, 2021, EVgo Services and Climate Change Crisis Real Impact I Acquisition Corporation (CLIIannounced a definitive agreement for a business combination that would result in EVgo becoming a publicly listed company. Upon closing of the transaction, the combined company will be named EVgo Inc. and publicly listed under the symbol “EVGO”.

Weekly Spread Changes:

The table below shows weekly spread changes between January 15, 2020, and January 22, 2020.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
DOYU 12.81 HUYA Inc. (HUYA) 24.03 36.94% 32.05% 4.89% All Stock
GMLP 3.43 New Fortress Energy Inc. (NFE) 46.17 3.50% 0.00% 3.50% All Cash
LINX 6.83 StoneCo Ltd. (STNE) 79 -8.49% -11.97% 3.48% Special Conditions
CLCT 91.65 D1 Capital Partners L.P., and Cohen Private Ventures, LLC (N/A) 0.38% -2.88% 3.26% All Cash
HCAP 7.76 Portman Ridge Finance Corporation (PTMN) 1.97 8.29% 5.48% 2.81% Cash Plus Stock
SINA 43.08 New Wave Holdings Limited (N/A) 0.74% 3.98% -3.24% All Cash
CKH 43.66 American Industrial Partners (N/A) 0.00 -4.95% -1.19% -3.76% All Cash
GSUM 1.82 Gridsum Corporation (N/A) 9.89% 14.29% -4.40% All Cash
CXDC 1.14 Faith Dawn Limited and Faith Horizon (N/A) 5.26% 12.15% -6.89% All Cash
APHA 12.92 Tilray, Inc. (TLRY) 18.02 16.89% 32.94% -16.05% All Stock

Deal Statistics:

Total Number of Deals Closed in 2021 10
Total Number of Pending Deals
Cash Deals 49
Stock Deals 18
Stock & Cash Deals 10
Special Conditions 4
Total Number of Pending Deals 81
Aggregate Deal Consideration $427.61 billion

New Deals:

  1. The acquisition of Coherent (COHR) by Lumentum Holdings (LITE) for $5.7 billion in a cash plus stock deal. Under the terms of the agreement, Coherent stockholders will receive $100 per share in cash and 1.1851 shares of Lumentum common stock for each Coherent share they own.

Deal Updates:

  1. On January 19, 2021, BridgeBio Pharma (BBIO) and Eidos Therapeutics (EIDX) announced that the stockholders of each of BridgeBio and Eidos voted to approve all proposals related to BridgeBio’s acquisition of all of the outstanding shares of Eidos common stock that BridgeBio does not already own. The merger is expected to close on or about January 26, 2021.
  2. On January 19, 2021, Standard AVB Financial (STND) announced that its stockholders approved the previously announced merger of Standard with and into Dollar Mutual Bancorp at a special meeting of stockholders.
  3. On January 20, 2021, West Fraser Timber (WFT) and Norbord (OSB) jointly announced that their shareholders have approved all resolutions relating to West Fraser’s acquisition of Norbord. The transaction is expected to be completed on February 1, 2021.
  4. On January 20, 2021, Collectors Universe (CLCT) and the Nat Turner, D1 Capital Partners and Cohen Private Ventures announced that they have entered into an amended and restated merger agreement under which Cards Acquisition, an affiliate of the Investor Group, has increased its offer to acquire all outstanding shares of Collectors Universe to a “best and final” offer of $92.00 per share in cash.
  5. On January 20, 2021, Golar LNG Partners (GMLP) announced that it has established a record date of January 25, 2021 for a special meeting of its unitholders currently planned to take place on February 24, 2021.
  6. On January 22, 2021, Acorn International (ATV) announced that the Company’s shareholders voted in favor of, among other things, the proposal to authorize and approve the previously announced agreement and plan of merger with First Ostia Port.
  7. On January 22, 2021, Gridsum Holding (GSUM) announced it has called an extraordinary general meeting of shareholders to be held on February 22, 2021.

Closed Deals:

  1. The acquisition of Mid-Con Energy Partners (MCEP) by Contango Oil & Gas Company (MCF) on January 21, 2021. It took 87 days for this deal to be completed.
  2. The acquisition of Prevail Therapeutics (PRVL) by Eli Lilly and Company (LLY) on January 22, 2021. It took 38 days for this deal to be completed. I was hoping to add to my position and pick up more to capture the CVRs associated with this deal but did not expect the deal to close in such a short period of time.

Top 10 deals with largest spreads:

Symbol Announced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
Profit Annualized
Profit
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $3.11 01/31/2021 74.60% 3889.76%
DOYU 10/12/2020 HUYA Inc. (HUYA) $17.54 $12.81 06/30/2021 36.94% 85.88%
APHA 12/16/2020 Tilray, Inc. (TLRY) $15.10 $12.92 06/30/2021 16.89% 39.27%
XLNX 10/27/2020 Advanced Micro Devices, Inc. (AMD) $159.91 $142.94 12/31/2021 11.88% 12.71%
GSUM 10/01/2020 Gridsum Corporation (N/A) $2.00 $1.8200 03/31/2021 9.89% 54.70%
ALXN 12/12/2020 AstraZeneca (AZN) $173.12 $159.73 09/30/2021 8.38% 12.29%
HCAP 12/23/2020 Portman Ridge Finance Corporation (PTMN) $8.40 $7.76 06/30/2021 8.29% 19.28%
OSN 12/17/2020 New Ossen Group Limited (N/A) $5.10 $4.71 06/30/2021 8.28% 19.25%
CBMG 08/12/2020 CBMG management (N/A) $19.75 $18.24 03/31/2021 8.28% 45.78%
WLTW 03/09/2020 Aon plc (AON) $222.98 $206.5 06/30/2021 7.98% 18.55%

List of all pending deals:

The list of all pending deals is only available to InsideArbitrage Premium members.

Conclusion:

M&A activity declined last week with just a single deal announced. There were however, multiple deals that received approval from their shareholders. The aggregate deal consideration increased to $427.61 billion.

Disclaimer: I have long positions in Otelco (OTEL), Zagg (ZAGG), Prevail Therapeutics (PRVL) and B. Riley Financial (RILY). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter@asifsuria

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