Merger Arbitrage Mondays – Buzzfeed To Go Public With 890 Fifth Avenue Partners

Merger activity increased significantly last week with seven new deals announced and one deal completed.

Three of the seven M&A deals announced last week were bank-related mergers. There have been 18 new deals announced in the month of June so far worth over $36 billion. This is a significant increase compared to the 6 deals announced in June 2020 that were worth over $17 billion. Business combinations in the SPAC area also continue to increase consistently.

Buzzfeed, the digital media and lifestyle company announced on Thursday, that it will become a publicly listed company through a SPAC deal by merging with 890 5th Avenue Partners (ENFA). Buzzfeed also announced plans to acquire Complex Networks from Verizon and publisher Hearst for $300m. Along with this acquisition, it will begin trading with an implied valuation of $1.5 billion.

Founded in 1879 and headquartered in Manchester, Connecticut, Lydall (LDL) designs and manufactures specialty engineered products for demanding thermal/acoustical and filtration/separation applications. During the COVID-19 pandemic, the company used its expertise in filtration technology to produce face masks that have been in high demand. Last week, Lydall entered into an agreement to be acquired by Unifrax, a company that makes high temperature-resistant fabricated products, coatings, insulation, furnace hardware, textiles, and battery materials. Unifrax will acquire Lydall for $62.10 per share in cash, implying a total enterprise value of approximately $1.3 billion. Lydall stock went up by 85% after the announcement of this news.

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

There was one new deal announced in the Deals in the Works section last week.

SPAC Arbitrage

There were 4 SPAC IPOs filed and 7 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.

  1. Quanergy Systems and CITIC Capital Acquisition (CCACentered into a business combination that will result in Quanergy becoming a publicly-listed company.
  2. Pear Therapeutics and Thimble Point Acquisition Corp. (THMAentered into a definitive business combination agreement.
  3. SAB Biotherapeutics (SAB) and Big Cypress Acquisition Corp. (BCYPentered into a definitive business combination agreement.
  4. Codere Online Luxembourg entered into a definitive business combination agreement with DD3 Acquisition Corp II (DDMX).
  5. Embark Trucks and Northern Genesis Acquisition Corp. II (NGABentered into a definitive business combination agreement that will result in Embark becoming a publicly listed company.
  6. Innovid entered into a definitive merger agreement with ION Acquisition Corp. 2 Ltd. (IACB).
  7. BuzzFeed announced that it will merge with 890 Fifth Avenue Partners (ENFA) to become a public company.

Weekly Spread Changes:

The table below shows weekly spread changes between June 18, and June 25, 2021.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
DOYU 7.09 HUYA Inc. (HUYA) 17.25 77.61% 48.12% 29.49% All Stock
TEDU 2.86 Kidedu Holdings Limited (N/A) 0.00 39.86% 25.39% 14.47% All Cash
SBBP 3.15 Xeris Pharmaceuticals, Inc. (XERS) 4.81 19.72% 11.11% 8.61% All Stock
WBT 23.6 The Middleby Corporation (MIDD) 171.12 -10.09% -16.54% 6.45% All Stock
SVBI 11.9 Shore Bancshares, Inc. (SHBI) 16.96 1.82% -3.18% 5.00% Cash Plus Stock
CORE 45.62 Performance Food Group Company (PFGC) 48.9 -0.50% 0.75% -1.25% Cash Plus Stock
CCRC 6.43 Taiying Group Ltd. and Taiying International Inc. (N/A) 0.00 1.09% 2.36% -1.27% All Cash
CADE 21.62 BancorpSouth Bank (BXS) 29.01 -0.29% 1.40% -1.69% Cash Plus Stock
XEC 73.05 Cabot Oil & Gas Corporation (COG) 16.82 -7.56% -4.83% -2.73% All Stock
BPY 19 Brookfield Asset Management Inc. (BAM) 52.2 -4.37% -1.41% -2.96% Special Conditions

Deal Statistics:

Total Number of Deals Closed in 2021 90
Total Number of Deals Not Completed in 2021 5
Total Number of Pending Deals
Cash Deals 45
Stock Deals 33
Stock & Cash Deals 13
Special Conditions 3
Total Number of Pending Deals 94
Aggregate Deal Consideration $770.48 billion

New Deals:

  1. The acquisition of Raven Industries (RAVN) by CNH Industrial (CNHI) for $2.1 billion or $58 per share in cash.
  2. The acquisition of 51job (JOBS) by Garnet Faith Limited in a going-private transaction for $3.63 billion or $79.05 per share in cash. We added JOBS as a potential deal to the Deals in the Works section on May 4, 2021, and the price after the news of the potential deal came out was $68.19.
  3. The acquisition of Lydall (LDL) by Unifrax for $1.3 billion or $62.10 per share in cash.
  4. The acquisition of Cortland Bancorp (CLDB) by Farmers National Banc Corp (FMNB) for $124 million in a cash or stock deal. Under the terms of the agreement, each shareholder of Cortland may elect to receive either $28.00 per share in cash or 1.75 shares of Farmers’ common stock, subject to an overall limitation of 75% of the shares being exchanged for Farmers shares and 25% for cash.
  5. The acquisition of County Bancorp (ICBK) by Nicolet Bankshares (NCBS) for $219 million in a cash or stock deal. Under the terms of the merger agreement, County shareholders have the right to receive for each share of County common stock, at the election of each holder and subject to proration, either cash of $37.18 per share of County common stock or 0.48 shares of Nicolet common stock. County shareholder elections will be prorated to ensure the total consideration will consist of approximately 20% cash and approximately 80% Nicolet common stock.
  6. The acquisition of SharpSpring (SHSP) by Clearlake Capital Group for $240 million or $17.10 per share in cash.
  7. The acquisition of Bank of Commerce Holdings (BOCH) by Columbia Banking System (COLB) for $266 million in an all stock deal. Under the terms of the merger agreement, Bank of Commerce shareholders are entitled to receive 0.40 of a share of Columbia common stock for each share of Bank of Commerce’s stock subject to certain potential adjustments.

Deal Updates:

  1. On June 17, 2021, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired in connection with the previously announced proposed merger between Chiasma (CHMA) and Amryt Pharma (AMYT).
  2. On June 21, 2021, Luminex Corporation (LMNX) announced that it has received shareholder approval to be acquired by DiaSorin.
  3. On June 21, 2021, Welbilt (WBT) and The Middleby Corporation (MIDD) announced that the special meeting of stockholders will be held virtually via the Internet on July 21, 2021.
  4. On June 23, 2021, Canadian National Railway Company (CNI) and Kansas City Southern (KSU) announced that the International Brotherhood of Boilermakers filed a letter of support for CN’s and KCS’ proposed voting trust with the Surface Transportation Board.
  5. On June 24, 2021, Pacific Mercantile Bancorp (PMBC) announced that it has received shareholder approval to be acquired by Banc of California (BANC).
  6. On June 24, 2021, II-VI Incorporated (IIVI) and Coherent (COHR) announced that II-VI’s shareholders and Coherent’s stockholders have each voted overwhelmingly to adopt and approve the previously announced merger agreement for II-VI to acquire Coherent.
  7. On June 24, 2021, LINX S.A. (LINX) announced that the final exchange ratio of the Transaction consideration to be liquidated through the delivery of StoneCo BDRs will be 0.0126730 StoneCo BDR for each redeemed STNE Class B preferred share, provided that each StoneCo BDR will correspond to one StoneCo (STNE) Class A Share.

Closed Deals:

  1. The acquisition of Cardtronics (CATM) by NCR Corporation (NCR) on June 21, 2021. It took 147 days for this deal to be completed.

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) $12.59 $7.09 06/30/2021 77.61% 9442.47%
TEDU 04/30/2021 Kidedu Holdings Limited (N/A) $4.00 $2.86 09/30/2021 39.86% 153.15%
MX 03/26/2021 South Dearborn Limited (N/A) $29.00 $24.11 12/31/2021 20.28% 39.59%
SBBP 05/24/2021 Xeris Pharmaceuticals, Inc. (XERS) $3.77 $3.15 11/15/2021 19.72% 51.04%
NEWA 10/02/2020 Crouching Tiger Holding Limited (N/A) $3.65 $3.23 06/30/2021 13.00% 1582.04%
OSN 12/17/2020 New Ossen Group Limited (N/A) $5.10 $4.55 06/30/2021 12.09% 1470.70%
SJR 03/15/2021 Rogers Communications Inc. (RCI) $32.40 $28.94 06/30/2022 11.96% 11.86%
KSU 05/21/2021 Canadian National Railway Company (CNI) $320.31 $286.47 12/31/2022 11.81% 7.81%
WLTW 03/09/2020 Aon plc (AON) $263.21 $235.5 07/31/2021 11.77% 126.30%
XLNX 10/27/2020 Advanced Micro Devices, Inc. (AMD) $147.56 $132.12 12/31/2021 11.68% 22.81%

List of all pending deals:

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

Conclusion:

Multiple deals continue to receive required regulatory and shareholder approvals as we come closer to the end of the second quarter of the year. In the SPAC area, the number of IPOs is consistent with the previous month so far with 19 SPAC IPOs announced in the month of June.

Disclaimer: I have long positions in Nuance Communications (NUAN), 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.

Leave A Comment

You must be logged in to post a comment.