Merger activity increased last week with five new deals announced and four deals completed. There were also eleven new SPAC business combinations announced last week and six new potential deals in the works.
The highlight for last week was the bidding war for Coherent (COHR). Coherent was founded with limited financial resources in the laundry room of one of its founding members in Palo Alto, CA. In the summer of 1966, next to a washer and dryer, and using a piece of rain gutter as a key component, Coherent’s founders began building their first laser. Four months later, Coherent unveiled the very first CO2 commercially available laser. The company that was significantly impacted by the COVD-19 pandemic is now in the middle of a bidding war. On January 19, Coherent agreed to be acquired by Lumentum for $5.7 billion. On February 8, MKS Instruments (MKSI) announced an unsolicited bid to acquire the company for $6 billion, a 16% premium over Lumentum’s bid and on February 12, II-VI Incorporated (IIVI) announced an unsolicited bid to acquire Coherent in a deal valued at $6.5 billion, a 10% premium to the MKS bid and a 24% premium to Lumentum’s bid.
On a personal note, it was also interesting to see the $12.50 per share cash offer by Electronic Arts (EA) for mobile gaming company Glu Mobile (GLUU). We have written about Glu Mobile several times in the past and in October 2012 mentioned that one of the catalysts for the company was a potential acquisition by Activision, Electronic Arts or Zynga. I didn’t realize then it may take more than 8 years for this to come to fruition. I first wrote about the company in early March 2010 here and here and the stock was trading under $1 and the Apple App Store ecosystem was young. The company had to transform its business model from making games for “feature phones” that were sold through carriers like Verizon to competing on a global scale through the App Store. After a lot of volatility in a business driven by hits, it is good to see this positive outcome for investors.
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.
There were six new deals announced in the Deals in the Works section last week.
SPAC Arbitrage
There were 26 new IPOs filed last week and 11 new SPAC business combinations announced. You can find the new SPAC IPO announcements in our new SPACs tool here.
Weekly Spread Changes:
The table below shows weekly spread changes between February 5, 2021, and February 12, 2021.
Symbol | Quote | Acquiring Company | Acquiring Company Quote | Current Spread | Last Week Spread | Spread Change Weekly | Deal Type |
---|---|---|---|---|---|---|---|
APHA | 16.94 | Tilray, Inc. (TLRY) | 29 | 43.48% | 29.31% | 14.17% | All Stock |
HPR | 11.19 | Bonanza Creek Energy, Inc. (BCEI) | 26.08 | -73.43% | -75.76% | 2.33% | All Stock |
NMCI | 6.78 | Navios Maritime Partners L.P. (NMM) | 17.83 | 2.56% | 1.63% | 0.93% | All Stock |
CMD | 76.98 | STERIS plc (STE) | 183 | 2.31% | 1.40% | 0.91% | Cash Plus Stock |
AJRD | 52.36 | Lockheed Martin Corporation (LMT) | 337.73 | 6.95% | 6.16% | 0.79% | All Cash |
NEWA | 3.79 | Crouching Tiger Holding Limited (N/A) | -3.69% | -0.82% | -2.87% | All Cash | |
GSUM | 1.9 | Gridsum Corporation (N/A) | 5.26% | 9.29% | -4.03% | All Cash | |
GNW | 4.11 | China Oceanwide Holdings Group Co., Ltd. (N/A) | 32.12% | 46.76% | -14.64% | All Cash | |
NEOS | 1.12 | Aytu BioScience, Inc. (AYTU) | 8.57 | -16.75% | -0.25% | -16.50% | All Stock |
COHR | 257.99 | Lumentum Holdings Inc. (LITE) | 93.95 | -18.08% | 6.23% | -24.31% | Cash Plus Stock |
Deal Statistics:
Total Number of Deals Closed in 2021 | 20 |
Total Number of Deals Not Completed in 2021 | 1 |
Total Number of Pending Deals | |
Cash Deals | 51 |
Stock Deals | 16 |
Stock & Cash Deals | 10 |
Special Conditions | 4 |
Total Number of Pending Deals | 81 |
Aggregate Deal Consideration | $460.26 billion |
New Deals:
Deal Updates:
Closed Deals:
Top 10 deals with largest spreads:
Symbol | Announced Date | Acquiring Company | Closing Price | Last Price | Closing Date | Profit | Annualized Profit |
---|---|---|---|---|---|---|---|
APHA | 12/16/2020 | Tilray, Inc. (TLRY) | $24.30 | $16.94 | 06/30/2021 | 43.48% | 116.68% |
DOYU | 10/12/2020 | HUYA Inc. (HUYA) | $24.83 | $18.72 | 06/30/2021 | 32.62% | 87.56% |
GNW | 10/23/2016 | China Oceanwide Holdings Group Co., Ltd. (N/A) | $5.43 | $4.11 | 01/31/2021 | 32.12% | -837.33% |
XLNX | 10/27/2020 | Advanced Micro Devices, Inc. (AMD) | $161.60 | $145.75 | 12/31/2021 | 10.88% | 12.41% |
IPHI | 10/29/2020 | Marvell Technology Group Ltd. (MRVL) | $191.02 | $174.87 | 12/31/2021 | 9.24% | 10.54% |
CHNG | 01/06/2021 | UnitedHealth Group Incorporated (UNH) | $25.75 | $23.69 | 12/31/2021 | 8.70% | 9.92% |
WLTW | 03/09/2020 | Aon plc (AON) | $246.28 | $227.42 | 06/30/2021 | 8.29% | 22.26% |
HCAP | 12/23/2020 | Portman Ridge Finance Corporation (PTMN) | $8.65 | $8.02 | 06/30/2021 | 7.84% | 21.03% |
SOGO | 09/29/2020 | Tencent Parties (N/A) | $8.95 | $8.26 | 07/31/2021 | 7.75% | 16.93% |
ALXN | 12/12/2020 | AstraZeneca (AZN) | $169.81 | $158.39 | 09/30/2021 | 7.21% | 11.54% |
List of all pending deals:
Conclusion:
With five new deals announced last week, we are at a total of nine new deals by the second week of February and 25 new deals so far since the beginning of the year. Out of the seven potential deals in the works announced this month, there are some significant ones like Chevron’s bid for Exxon Mobil and Noble Midstream, Microsoft’s bid for Pinterest and the two unsolicited bids for Coherent. The number of business combinations and IPOs announced in the area of SPACs continues to keep up its pace. There has also been a significant increase in the number of registrations filed for SPAC IPOs.
Disclaimer: I have long positions in Otelco (OTEL) and Zagg (ZAGG). 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.
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