Merger activity increased last week with seven new deals announced and four deals completed. In keeping with what we have been seeing for several weeks, two of these seven new deals were banking related mergers.
There were a total of 24 deals announced in the month of April for a total deal value of over $114 billion. Looking back one year, we had only 2 deals announced in April 2020, which was the lowest deal volume we had seen in a decade. Four of the seven deals announced last week were multi-billion dollar deals.
Founded in 1854 and headquartered in Columbia, Maryland, W. R. Grace (GRA) is a global specialty chemical company, that operates through two business segments—Catalysts Technologies and Materials Technologies. We added W. R. Grace as a potential deal in the works on November 9, 2020, when it received a proposal from 40 North Management LLC, one of its shareholders, to acquire all outstanding common shares of the Company for $60 per share in cash. On January 11, 2021, 40 North Management increased its offer to acquire all of the outstanding shares of common stock of GRA for $65 per share in cash and further increased the offer to $70 on April 1, 2021. On April 26, 2021, W. R. Grace entered into a definitive agreement under which Standard Industries Holdings will acquire Grace in an all-cash transaction valued at approximately $7.0 billion, including Grace’s pending pharma fine chemistry acquisition. 40 North is a “related investment” business of Standard Industries. The $70 purchase price represents a premium of approximately 59% over Grace’s closing stock price of $44.05 on November 6, 2020, the last trading day prior to the announcement of 40 North’s initial proposal to acquire the Company on November 9, 2020.
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.
There were no new deals announced in the Deals in the Works section last week.
SPAC Arbitrage
There were 3 new SPAC IPOs and 4 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.
Weekly Spread Changes:
The table below shows weekly spread changes between April 23, 2021, and April 30, 2021.
Symbol | Quote | Acquiring Company | Acquiring Company Quote | Current Spread | Last Week Spread | Spread Change Weekly | Deal Type |
---|---|---|---|---|---|---|---|
DOYU | 9.11 | HUYA Inc. (HUYA) | 17.62 | 41.19% | 28.62% | 12.57% | All Stock |
AJRD | 46.72 | Lockheed Martin Corporation (LMT) | 380.56 | 9.16% | 4.94% | 4.22% | All Cash |
MX | 25.01 | South Dearborn Limited (N/A) | 15.95% | 12.10% | 3.85% | All Cash | |
KSU | 292.21 | Canadian Pacific Railway Limited (CP) | 373.13 | -6.76% | -10.06% | 3.30% | Cash Plus Stock |
LEAF | 8.86 | Graham Holdings Company (GHC) | 635.61 | -4.06% | -6.70% | 2.64% | All Cash |
HCAP | 9.04 | Portman Ridge Finance Corporation (PTMN) | 2.38 | 11.48% | 14.46% | -2.98% | Cash Plus Stock |
CADE | 22.25 | BancorpSouth Bank (BXS) | 29.59 | -1.29% | 1.97% | -3.26% | Cash Plus Stock |
MRLN | 22.55 | HPS Investment Partners LLC (N/A) | 0.00 | 4.21% | 8.70% | -4.49% | All Cash |
SJR | 28.93 | Rogers Communications Inc. (RCI) | 49.23 | 11.99% | 16.59% | -4.60% | Special Conditions |
CXDC | 1.07 | Faith Dawn Limited and Faith Horizon (N/A) | 12.15% | 17.07% | -4.92% | All Cash |
Deal Statistics:
Total Number of Deals Closed in 2021 | 66 |
Total Number of Deals Not Completed in 2021 | 3 |
Total Number of Pending Deals | |
Cash Deals | 44 |
Stock Deals | 25 |
Stock & Cash Deals | 15 |
Special Conditions | 4 |
Total Number of Pending Deals | 88 |
Total Deal Size | $704.04 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 |
---|---|---|---|---|---|---|---|
DOYU | 10/12/2020 | HUYA Inc. (HUYA) | $12.86 | $9.11 | 06/30/2021 | 41.19% | 254.83% |
MX | 03/26/2021 | South Dearborn Limited (N/A) | $29.00 | $25.01 | 12/31/2021 | 15.95% | 23.96% |
CHNG | 01/06/2021 | UnitedHealth Group Incorporated (UNH) | $25.75 | $22.95 | 12/31/2021 | 12.20% | 18.33% |
CXDC | 06/15/2020 | Faith Dawn Limited and Faith Horizon (N/A) | $1.20 | $1.07 | 05/10/2021 | 12.15% | 554.32% |
SJR | 03/15/2021 | Rogers Communications Inc. (RCI) | $32.40 | $28.93 | 06/30/2022 | 11.99% | 10.33% |
HCAP | 12/23/2020 | Portman Ridge Finance Corporation (PTMN) | $10.08 | $9.04 | 06/30/2021 | 11.48% | 71.00% |
XLNX | 10/27/2020 | Advanced Micro Devices, Inc. (AMD) | $140.66 | $127.96 | 12/31/2021 | 9.93% | 14.91% |
AJRD | 12/20/2020 | Lockheed Martin Corporation (LMT) | $51.00 | $46.72 | 12/31/2021 | 9.16% | 13.76% |
OSN | 12/17/2020 | New Ossen Group Limited (N/A) | $5.10 | $4.71 | 06/30/2021 | 8.28% | 51.23% |
COHR | 03/25/2021 | II-VI Incorporated (IIVI) | $281.10 | $259.99 | 12/31/2021 | 8.12% | 12.19% |
List of all pending deals:
Conclusion:
The number of new deals announced in a month this year has been consistently increasing from 16 deals announced in January 2021, 19 in February 2021, 21 in March 2021, and 24 in April 2021. The SPAC frenzy on the other hand has almost fizzled out with just 13 SPAC IPOs announced in the month of April when compared to the record-breaking 111 SPAC IPOs that were announced in March 2021.
Disclaimer: I have long positions in Change Healthcare (CHNG) and Brookfield Property Partners (BPY). 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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