Merger Arbitrage Mondays – Thoma Bravo Announces Two Large Deals In A Single Month

  • August 2, 2021

Merger activity decreased last week with four new deals announced and two deals completed. There were 19 new deals announced in the month of July with a total value of over $61.5 billion.

The largest deal announced last week was the acquisition of Medallia (MDLA) by Thoma Bravo for $6.4 billion. This is Thoma Bravo’s second acquisition in the month of July after Stamps.com.  Founded in 2000 and  headquartered in San Francisco, California, Medallia is an enterprise software firm that provides an enterprise Software-as-a-Service platform internationally. We added Medallia as a potential deal in the works on June 11, 2021 after Bloomberg reported that it was exploring options including a potential sale. The company entered into a definitive agreement to be acquired by Thoma Bravo on July 26, 2021 for $34.00 per share in cash representing a premium of approximately 20% to Medallia’s unaffected closing stock price on June 10, 2021.

Another highlight from last week was Aon  (AON) and Willis Towers Watson (WLTW) terminating their business combination agreement and ending litigation with the U.S. Department of Justice (DOJ). In connection with the termination of the business combination agreement, Aon will pay a massive $1 billion termination fee to Willis Towers Watson. This was the fifth failed deal this year, four of which failed on account of regulatory issues. We wrote briefly about the changing M&A regulatory landscape in our August 2021 special situations newsletter

Aon CEO Greg Case said, “Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the U.S. Department of Justice. The DOJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy. We are confident that the combination would have accelerated our shared ability to innovate on behalf of clients, but the inability to secure an expedited resolution of the litigation brought us to this point.”

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

  1. AdTheorent and MCAP Acquisition Corporation (MACQ) announced that they have entered into a definitive business combination agreement .
  2. Allego Holding B.V. announced a business combination with Spartan Acquisition Corp. III (SPAQU).
  3. Swvl Inc. and Queen’s Gambit Growth Capital (GMBT) announced that they have entered into a definitive agreement for a business combination.
  4. Vacasa entered into an agreement to become a publicly traded company through a business combination with TPG Pace Solutions (TPGS).

Weekly Spread Changes:

The table below shows weekly spread changes between July 16, and July 23, 2021

SymbolQuoteAcquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
TEDU1.98Kidedu Holdings Limited (N/A)0.00102.02%70.21%31.81%All Cash
MX20.78South Dearborn Limited (N/A)39.56%29.00%10.56%All Cash
JOBS72.02Garnet Faith Limited (N/A)0.009.76%1.59%8.17%All Cash
XLNX149.84Advanced Micro Devices, Inc. (AMD)106.1922.14%15.20%6.94%All Stock
COHR245.94II-VI Incorporated (IIVI)69.8115.28%9.69%5.59%Cash Plus Stock
MMAC27.56Fundamental Advisors LP (N/A)0.76%1.65%-0.89%All Cash
HBMD19.7F.N.B. Corporation (FNB)11.464.71%6.03%-1.32%All Stock
OSN4.505New Ossen Group Limited (N/A)13.21%14.61%-1.40%All Cash
MNR19.04Equity Commonwealth (EQC)26.29-6.54%-4.75%-1.79%Cash Plus Stock
CHMA4Amryt Pharma (AMYT)10.312.07%4.42%-2.35%All Stock

Deal Statistics:

Total Number of Deals Closed in 2021109
Total Number of Deals Not Completed in 20218
Total Number of Pending Deals
Cash Deals46
Stock Deals36
Stock & Cash Deals10
Special Conditions2
Total Number of Pending Deals94
Aggregate Deal Consideration$794.08 billion

New Deals:

  1. The acquisition of Medallia (MDLA) by Thoma Bravo for $6.4 billion or $34.00 per share in cash. We added MDLA as a potential deal to the Deals in the Works section on June 11, 2021, and the price after the news of the potential deal came out was $33.11.
  2. The acquisition of Investors Bancorp (ISBC) by Citizens Financial Group (CFG) for $3.5 billion in a cash plus stock deal. Under the terms of the agreement and plan of merger, Investors shareholders will receive 0.297 of a share of CFG common stock and $1.46 in cash for each share of Investors they own.
  3. The acquisition of Misonix (MSON) by Bioventus (BVS) for $518 million. Under the terms of the agreement, Misonix stockholders may elect to receive either (i) 1.6839 shares of Bioventus class A common stock or (ii) $28.00 in cash, without interest, for each share of Misonix common stock they hold.
  4. The merger of Benefit Street Partners Realty Trust and Capstead Mortgage Corporation (CMO). Under the terms of the agreement, Capstead common stockholders will receive a cash payment equal to a 15.75% premium to Capstead’s diluted book value per share and shares of BSPRT common stock calculated on an adjusted “book-for-book” basis. The book values for Capstead and BSPRT used to calculate the cash consideration and exchange ratio will be set on a date prior to the closing of the transaction. Considering that the exchange ratio will be set prior to the closing, we are not adding this deal to the MAT.

Deal Updates:

  1. On July 26, 2021, Talend (TLND) announced that its shareholders voted to approve a series of transactions that will result in the company structurally, but not operationally, redomiciling in the Netherlands following the consummation of Thoma Bravo’s tender offer.
  2. On July 26, 2021, outside legal counsel of each of Magnachip Semiconductor (MX) and South Dearborn Limited received a letter from the Acting CFIUS Staff Chairperson notifying the parties that CFIUS will undertake an investigation of the Merger pursuant to Section 721(b)(2) of the DPA, which will be completed no later than September 13, 2021.
  3. On July 27, 2021, WSFS Financial Corporation (WSFSreceived approval from the Office of the Comptroller of the Currency (OCC) to merge with Bryn Mawr Bank Corporation (BMTC).
  4. July 29, 2021: According to Reuters, Canadian Pacific Railway (CP) asked Kansas City Southern (KSU) shareholders to vote against a deal with Canadian National Railway (CNI) at a meeting next month.
  5. On July 29, 2021, stockholders of Domtar Corporation (UFSapproved a proposal to adopt a business combination with Paper Excellence.
  6. On July 29, 2021, American River Bankshares (AMRB) announced that it has received shareholder approval to be acquired by Bank of Marin Bancorp (BMRC).

Closed Deals:

  1. The acquisition of Brookfield Property Partners (BPY) by Brookfield Asset Management (BAM) on July 26, 2021. It took 116 days for this deal to be completed.
  2. The acquisition of Talend (TLND) by Thoma Bravo on July 30, 2021. It took 142 days for this deal to be completed.

Deals Terminated:

  1. On July 26, 2021, Aon (AON) and Willis Towers Watson (WLTW) announced that the firms have agreed to terminate their business combination agreement and end litigation with the U.S. Department of Justice (DOJ).

Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnualized
Profit
TEDU04/30/2021Kidedu Holdings Limited (N/A)$4.00$1.9809/30/2021102.02%620.62%
MX03/26/2021South Dearborn Limited (N/A)$29.00$20.7812/31/202139.56%94.99%
XLNX10/27/2020Advanced Micro Devices, Inc. (AMD)$183.01$149.8412/31/202122.14%53.15%
KSU05/21/2021Canadian National Railway Company (CNI)$322.64$267.812/31/202220.48%14.46%
CHNG01/06/2021UnitedHealth Group Incorporated (UNH)$25.75$21.7112/31/202118.61%44.69%
COHR03/25/2021II-VI Incorporated (IIVI)$283.53$245.9412/31/202115.28%36.70%
OSN12/17/2020New Ossen Group Limited (N/A)$5.10$4.50509/30/202113.21%80.35%
SJR03/15/2021Rogers Communications Inc. (RCI)$32.40$29.1806/30/202211.03%12.10%
JOBS06/21/2021Garnet Faith Limited (N/A)$79.05$72.0212/31/20219.76%23.44%
AJRD12/20/2020Lockheed Martin Corporation (LMT)$51.00$47.1812/31/20218.10%19.44%

List of all pending deals:

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

TargetAnnounced
Date
AcquirerDeal
Type
Closing
Value
Deal
Price
Last
Price
Target VolumeEstimated
Closing Date
ReturnAnnualized
Return
+TEDU4/30/21Kidedu Holdings Limited (N/A)All Cash$230.6 M$4.00$1.98242,8289/30/21102.02%631.14%
+MX3/26/21South Dearborn Limited (N/A)All Cash$1.4 B$29.00$20.78470,17212/31/2139.56%95.62%
+XLNX10/27/20Advanced Micro Devices, Inc. (AMD)All Stock$33.43 B$183.01$149.842,692,86612/31/2122.14%53.51%
+KSU5/21/21Canadian National Railway Company (CNI)Cash Plus Stock$33.6 B$322.64$267.8506,51112/31/2220.48%14.49%
+CHNG1/06/21UnitedHealth Group Incorporated (UNH)All Cash$13.28 B$25.75$21.712,531,35312/31/2118.61%44.98%
+COHR3/25/21II-VI Incorporated (IIVI)Cash Plus Stock$6.84 B$283.53$245.94158,95212/31/2115.28%36.94%
+OSN12/17/20New Ossen Group Limited (N/A)All Cash$84.96 M$5.10$4.505143,4979/30/2113.21%81.71%
+SJR3/15/21Rogers Communications Inc. (RCI)Special Conditions$26 B$32.40$29.18272,3626/30/2211.03%12.13%
+JOBS6/21/21Garnet Faith Limited (N/A)All Cash$3.63 B$79.05$72.021,201,82412/31/219.76%23.59%
+AJRD12/20/20Lockheed Martin Corporation (LMT)All Cash$3.79 B$51.00$47.18348,67112/31/218.10%19.57%
+FOE5/11/21Prince International Corporation (N/A)All Cash$2.1 B$22.00$20.8426,6243/31/225.77%8.74%
+MXIM7/13/20Analog Devices, Inc. (ADI)All Stock$21 B$105.47$99.911,365,3306/30/215.57%0.00%
+MSON7/29/21Bioventus Inc. (BVS)Special Conditions$518 million$28.00$26.54660,35212/31/215.50%13.30%
+HBMD7/13/21F.N.B. Corporation (FNB)All Stock$418 M$20.63$19.774,2711/31/224.71%9.45%
+ATH3/08/21Apollo Global Management, Inc. (APO)All Stock$6.01 B$67.63$64.62547,6071/31/224.66%9.34%
+MRLN4/19/21HPS Investment Partners LLC (N/A)All Cash$109.4 M$23.50$22.5634,5833/31/224.17%6.31%
+INFO11/30/20S&P Global (SPGI)All Stock$44 B$121.67$116.844,093,95812/31/214.13%9.99%
+PNM10/21/20Avangrid, Inc. (AGR)All Cash$8.05 B$50.30$48.33526,26412/31/214.08%9.85%
+STFC7/12/21Liberty Mutual Holding Company Inc. (N/A)All Cash$2.48 B$52.00$50336,7443/31/224.00%6.06%
+FIVN7/18/21Zoom Video Communications, Inc. (ZM)All Stock$14.7 B$209.20$201.291,176,1126/30/223.93%4.32%
+BOCH6/24/21Columbia Banking System, Inc. (COLB)All Stock$266 M$13.98$13.4761,17912/31/213.76%9.08%
+FVCB7/14/21Blue Ridge Bankshares, Inc. (BRBS)All Stock$113.36 M$19.69$1929,8051/31/223.61%7.24%
+ESXB6/03/21United Bankshares, Inc. (UBSI)All Stock$303.3 M$10.96$10.668,98112/31/213.39%8.20%
+FBC4/26/21New York Community Bancorp, Inc. (NYCB)All Stock$2.6 B$47.30$45.76200,81712/31/213.36%8.12%
+ACBI7/23/21South State Corporation (SSB)All Stock$542 M$24.78$24.00217,1233/31/223.26%4.94%
+SOLY5/10/21Allergan Aesthetics (N/A)All Cash$550 M$22.60$21.93567,7539/30/213.06%18.90%
+PPD4/15/21Thermo Fisher Scientific Inc. (TMO)All Cash$20.9 B$47.50$46.12971,12712/31/212.99%7.23%
+FCCY7/12/21Lakeland Bancorp, Inc. (LBAI)All Stock$244.4 M$22.23$21.5917,9441/31/222.94%5.90%
+ATC7/01/21MKS Instruments, Inc. (MKSI)Cash Plus Stock$6.5 B$24.84$24.151,344,29812/31/212.84%6.86%
+SLCT6/01/21First Bancorp (FBNC)All Stock$314.3 M$16.32$15.925,42412/31/212.64%6.39%
+STL4/19/21Webster Financial Corporation (WBS)All Stock$5.12 B$22.27$21.711,119,95612/31/212.58%6.24%
+GPX7/15/21Learning Technologies Group (N/A)All Cash$394 M$20.85$20.35204,43912/31/212.46%5.94%
+RIVE7/01/21Mid Penn Bancorp, Inc. (MPB)All Stock$124.7 M$12.59$12.31,13512/31/212.36%5.70%
+CORE5/18/21Performance Food Group Company (PFGC)Cash Plus Stock$2.5 B$44.04$43.04240,8716/30/222.31%2.54%
+WRI4/15/21Kimco Realty Corporation (KIM)Cash Plus Stock$6.12 B$32.92$32.19804,80612/31/212.28%5.50%
+PMBC3/23/21Banc of California (BANC)All Stock$235 M$8.56$8.3723,9739/30/212.27%14.04%
+TRMT4/26/21RMR Mortgage Trust (RMRM)All Stock$252.33 M$5.93$5.820,0989/30/212.21%13.65%
+WBT7/14/21Ali Holding S.r.l. (N/A)All Cash$4.8 B$24.00$23.492,195,5541/31/222.17%4.35%
+CHMA5/05/21Amryt Pharma (AMYT)All Stock$53.61 M$4.08$4371,4229/30/212.07%12.80%
+NUAN4/12/21Microsoft Corp (MSFT)All Cash$19.7 B$56.00$54.92,263,84812/31/212.00%4.84%
+RBNC7/15/21United Community Banks, Inc. (UCBI)All Stock$517 M$28.35$27.867,0963/31/222.00%3.02%
+SPWH12/21/20The Great American Outdoors Group (N/A)All Cash$1.5 B$18.00$17.67933,35512/31/211.87%4.51%
+ORBC4/08/21GI Partners (N/A)All Cash$1.1 B$11.50$11.29281,72912/31/211.86%4.50%
+FMBI6/01/21Old National Bancorp (ONB)All Stock$2.86 B$18.24$17.92502,8131/31/221.78%3.58%
+ALTA5/18/21Glacier Bancorp, Inc. (GBCI)All Stock$933.5 M$41.10$40.3936,40112/31/211.75%4.24%
+FRTA2/22/21Quikrete Holdings, Inc. (N/A)All Cash$2.74 B$24.00$23.5992,63912/31/211.74%4.20%
+EBSB4/23/21Independent Bank Corp. (INDB)All Stock$1.15 B$19.44$19.11180,65112/31/211.71%4.14%
+USCR6/07/21Vulcan Materials Company (VMC)All Cash$2.32 B$74.00$72.81194,86612/31/211.63%3.95%
+CADE4/12/21BancorpSouth Bank (BXS)Cash Plus Stock$2.7 B$19.31$19317,10912/31/211.63%3.94%
+LDL6/21/21Unifrax (N/A)All Cash$1.3 B$62.10$61.2166,15012/31/211.47%3.55%
+MFNC4/13/21Nicolet Bankshares, Inc. (NCBS)Cash Plus Stock$248 M$20.57$20.2731,1899/30/211.46%9.03%
+KIN6/16/21Elanco Animal Health Incorporated (ELAN)All Cash$440 M$9.25$9.12286,4249/30/211.43%8.82%
+JAX7/02/21SPB Hospitality LLC (N/A)All Cash$220 M$14.00$13.8123,68911/15/211.38%4.78%
+ENBL2/17/21Energy Transfer LP (ET)All Stock$7.2 B$8.47$8.36630,1066/30/211.37%0.00%
+CLDB6/23/21Farmers National Banc Corp. (FMNB)All Stock$124 M$26.86$26.512,36912/31/211.37%3.31%
+XOG5/10/21Bonanza Creek Energy, Inc. (BCEI)All Stock$2.6 B$45.05$44.49152,2479/30/211.26%7.82%
+SNR6/28/21Ventas, Inc. (VTR)All Stock$2.3 B$9.33$9.221,810,12512/31/211.21%2.93%
+VER4/29/21Realty Income Corporation (O)All Stock$17.66 B$49.55$48.971,211,10412/31/211.19%2.88%
+ISBC7/28/21Citizens Financial Group, Inc. (CFG)Cash Plus Stock$3.5 B$13.98$13.825,042,6296/30/221.17%1.28%
+NWHM7/23/21Apollo Global Management (N/A)All Cash$338 M$9.00$8.90135,75112/31/211.12%2.72%
+UFS5/11/21Paper Excellence (N/A)All Cash$3.02 B$55.50$54.91532,44912/31/211.07%2.60%
+CBB3/13/20Macquarie Infrastructure Partners (N/A)All Cash$2.9 B$15.50$15.34539,5909/30/211.04%6.45%
+STMP7/09/21Thoma Bravo (N/A)All Cash$6.6 B$330.00$326.76332,6849/30/210.99%6.13%
+SVBI3/03/21Shore Bancshares, Inc. (SHBI)Cash Plus Stock$146 M$12.35$12.241,5969/30/210.92%5.71%
+QADA6/28/21Thoma Bravo (N/A)All Cash$2 B$87.50$86.75139,61512/31/210.86%2.09%
+CLDR6/01/21Clayton, Dubilier & Rice and KKR (N/A)All Cash$5.3 B$16.00$15.872,740,65912/31/210.82%1.98%
+SOGO9/29/20Tencent Parties (N/A)All Cash$2.19 B$8.95$8.83264,7007/31/210.79%0.00%
+CNBKA4/07/21Eastern Bankshares, Inc. (EBC)All Cash$642 M$115.28$114.3813,17312/31/210.79%1.90%
+PFPT4/26/21Thoma Bravo (N/A)All Cash$12.3 B$176.00$174.66604,8559/30/210.77%4.75%
+MMAC5/24/21Fundamental Advisors LP (N/A)All Cash$161.7 M$27.77$27.5660,3729/30/210.76%4.71%
+CVA7/14/21EQT Infrastructure (N/A)All Cash$5.35 B$20.25$20.11,577,08412/31/210.75%1.80%
+MGLN1/04/21Centene Corporation (CNC)All Cash$2.2 B$95.00$94.32281,04812/31/210.72%1.74%
+SBBP5/24/21Xeris Pharmaceuticals, Inc. (XERS)All Stock$267 M$2.41$2.39485,48611/15/210.71%2.46%
+PROS1/15/21TowerBrook Capital Partners and Further Global Capital Management (N/A)All Cash$586 M$12.85$12.7629,0769/30/210.71%4.36%
+BMTC3/10/21WSFS Financial Corporation (WSFS)All Stock$976.4 M$39.40$39.1336,82712/31/210.70%1.68%
+BWL-A5/28/21Bowlero Corp. (N/A)All Cash$42.58 M$9.13$9.071,14812/31/210.66%1.60%
+SHSP6/22/21Clearlake Capital Group, L.P. (N/A)All Cash$240 M$17.10$16.99259,3389/30/210.65%4.01%
+SYKE6/18/21Sitel Group (N/A)All Cash$2.2 B$54.00$53.66255,35512/31/210.63%1.53%
+PBCT2/22/21M&T Bank Corporation (MTB)All Stock$7.6 B$15.79$15.713,122,63212/31/210.60%1.45%
+CIT10/16/20First Citizens BancShares, Inc. (FCNCA)All Stock$2.42 B$48.52$48.24623,2056/30/210.58%0.00%
+GRA4/26/21Standard Industries Holdings Inc. (N/A)All Cash$7 B$70.00$69.6186,85112/31/210.57%1.39%
+AMRB4/19/21Bank of Marin Bancorp (BMRC)All Stock$134.5 M$19.95$19.853,5249/30/210.52%3.19%
+PFBI3/29/21Peoples Bancorp Inc. (PEBO)All Stock$292.3 M$17.10$17.0212,7999/30/210.49%3.06%
+MDLA7/26/21Thoma Bravo (N/A)All Cash$6.4 B$34.00$33.874,513,22012/31/210.38%0.93%
+QTS6/07/21Blackstone (BX)All Cash$10 B$78.00$77.711,357,87612/31/210.37%0.90%
+CAI6/17/21Mitsubishi HC Capital Inc. (N/A)All Cash$2.9 B$56.00$55.81127,86412/31/210.34%0.82%
+ICBK6/22/21Nicolet Bankshares, Inc. (NCBS)All Stock$219 M$34.75$34.696,38312/31/210.16%0.40%
+FLY3/29/21Carlyle Aviation Partners (N/A)All Cash$2.36 B$17.05$17.03262,4219/30/210.12%0.73%
+ICON6/11/21Iconix Acquisition Corp. (N/A)All Cash$585 M$3.15$3.1578,4079/30/210.00%0.00%
+VNE7/22/21Magna International Inc. (MGA)All Cash$3.3 B$31.25$31.321,669,22412/31/21-0.22%-0.54%
+RPAI7/16/21Kite Realty Group Trust (KRG)All Stock$4.96 B$12.56$12.611,841,62612/31/21-0.40%-0.96%
+RAVN6/21/21CNH Industrial N.V (CNHI)All Cash$2.1 B$58.00$58.25380,26112/31/21-0.43%-1.04%
+XEC5/24/21Cabot Oil & Gas Corporation (COG)All Stock$8.59 B$64.23$65.2866,94012/31/21-1.48%-3.58%
+MNR5/04/21Equity Commonwealth (EQC)Cash Plus Stock$3.4 B$17.79$19.04468,83112/31/21-6.54%-15.81%

Conclusion:

There were fourteen potential deals in the works announced in the month of July. This is the highest number of potential deals we have added in a month. SPAC activity continues to grow with 28 SPAC IPOs filed in the month of July and 29 SPAC business combinations announced.

Disclaimer: I have long positions Nuance Communications (NUAN) and Change Healthcare (CHNG). 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.