Merger Arbitrage Mondays – Emerson Combines Its Industrial Software Businesses With Aspen Technology

  • October 18, 2021

Merger activity remained steady last week with four new deals announced and three deals completed. Two of the new deals announced last week included contingent value rights and one was a successful deal-in-the-works.

Headquartered in Bedford, Massachusetts, Aspen Technology (AZPN) was founded in the year 1981 as a result of a joint research project between the Massachusetts Institute of Technology (MIT) and US Department of Energy, called the Advanced System for Process Engineering (ASPEN) Project. The company provides industrial optimization software to capital-intensive industries.

We added Aspen Technology to our list of potential deals in the works on October 6, 2021, when Bloomberg reported that Emerson Electric (EMR)  was in talks over a combination with Aspen Technology to create an industrial software giant. Aspen’s price on the day before this announcement was $125.52. Emerson is combining its industrial software businesses – OSI Inc. and the Geological Simulation Software business with AspenTech to create a diversified, high-performance industrial software company (“new AspenTech”) with greater scale, capabilities and technologies. Shareholders of AspenTech will receive approximately $87 per share in cash and 0.42 shares of common stock of the newly formed company (new AspenTech), implying a total consideration of approximately $160 per AspenTech share, which represents a premium of approximately 27% compared to AspenTech’s closing stock price on October 6, 2021.

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 10 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. TradeZero Holding Corp., which through its U.S. and Bahamas based broker-dealers offers a trading platform targeting the global active trader community, and Dune Acquisition Corporation (DUNEentered into a definitive agreement for their business combination.
  2. SeatGeek, a mobile-centric technology platform and RedBall Acquisition (RBAC) announced the signing of a definitive business combination agreement to take SeatGeek public.
  3. Tempo Automation, software-accelerated electronics manufacturer and ACE Convergence Acquisition (ACEVentered into a definitive merger agreement.
  4. Tiger Resort, Leisure and Entertainment, operating as Okada Manila, one of the premier destination casino resorts in Asia and the largest integrated resort in the Philippines, along with Miami-based publicly traded special purpose acquisition company, 26 Capital Acquisition (ADER), announced that they have entered into a merger agreement.

Weekly Spread Changes:

The table below shows weekly spread changes between October 8 and October 15, 2021.

Company Quote
Last Week
Spread Change
XONE21.78Desktop Metal, Inc. (DM)6.9217.08%12.19%4.89%Special Conditions
FVCB20.39Blue Ridge Bankshares, Inc. (BRBS)18.574.66%2.02%2.64%All Stock
KOR3.27AngloGold Ashanti Limited (N/A)0.61%-1.54%2.15%All Cash
VNE35.16Qualcomm Incorporated (QCOM)130.25.23%3.35%1.88%All Cash
MSON24.89Bioventus Inc. (BVS)13.6412.49%10.72%1.77%Special Conditions
SLCT18.88First Bancorp (FBNC)45.88-0.85%0.17%-1.02%All Stock
AJRD43.9Lockheed Martin Corporation (LMT)365.6216.17%17.24%-1.07%All Cash
SVBI12.9Shore Bancshares, Inc. (SHBI)17.96-1.26%0.20%-1.46%Cash Plus Stock
RIVE13.47Mid Penn Bancorp, Inc. (MPB)28.211.22%5.29%-4.07%All Stock
TEDU1.07Kidedu Holdings Limited (N/A)273.83%288.35%-14.52%All Cash

Deal Statistics:

Total Number of Deals Closed in 2021149
Total Number of Deals Not Completed in 202112
Total Number of Pending Deals
Cash Deals49
Stock Deals31
Stock & Cash Deals8
Special Conditions4
Total Number of Pending Deals92
Total Deal Size$920 billion

New Deals:

  1. The acquisition of Flexion Therapeutics (FLXN) by Pacira BioSciences (PCRX) for $570.84 million or $8.50 per share in cash. Shareholders of Flexion Therapeutics will also be entitled to receive one non-tradeable CVR. The CVR will entitle Flexion stockholders to up to an additional $8.00 per share in cash payable (subject to certain terms and conditions) upon achievement of the following milestones:
    • $1.00 per share if total calendar year ZILRETTA net sales achieve $250 million;
    • $2.00 per share if total calendar year ZILRETTA net sales achieve $375 million;
    • $3.00 per share if total calendar year ZILRETTA net sales achieve $500 million;
    • $1.00 per share upon U.S. FDA approval of FX201; and
    • $1.00 per share upon U.S. FDA approval of FX301.

    The milestones associated with each contingent cash payment must be achieved, if at all, on or before December 31, 2030. There can be no assurance any payments will be made with respect to the CVR. Because of the uncertain value of the CVR, we are treating this as a ‘special conditions’ deal and using the cash value as the deal price.

  2. The acquisition of Adamas Pharmaceuticals (ADMS) by Supernus Pharmaceuticals (SUPN) for $460.12 million or $8.10 per share in cash. The shareholders of Adamas Pharmaceuticals will also be entitled to receive two non-tradable contingent value rights (CVR) collectively worth up to $1.00 per share in cash (or an aggregate of approximately $50 million), for a total consideration of $9.10 per share in cash (or an aggregate of approximately $450 million). The first CVR, worth $0.50 per share, is payable upon achieving net sales of GOCOVRI of $150 million in any four consecutive quarters between closing and the end of 2024. The second CVR, worth $0.50 per share, is payable upon achieving net sales of GOCOVRI of $225 million in any four consecutive quarters between closing and the end of 2025. The transaction is expected to close in late fourth quarter 2021 or in early first quarter 2022. Because of the uncertain value of the CVR, we are treating this as a ‘special conditions’ deal and using the cash value as the deal price.
  3. The merger of Umpqua Holdings Corporation (UMPQ) and Columbia Banking System (COLB) for $4.5 billion in an all stock deal. Under the terms of the agreement, Umpqua shareholders will receive 0.5958 of a share of Columbia stock for each Umpqua share they own.
  4. The merger of Aspen Technology (AZPN) with Emerson’s (EMR) industrial software businesses for $12.34 billion. Under the terms of the agreement, AspenTech shareholders will receive approximately $87 per share in cash and 0.42 shares of common stock of the new AspenTech, a newly formed company, for each share of AspenTech common stock they own, which implies total consideration of approximately $160 per AspenTech share. We have added this as a special conditions deal since the stock portion of the transaction will be determined only after the new company is formed. We added AZPN as a potential deal to the Deals in the Works section on October 6, 2021, and the price after the news of the potential deal came out was $125.52.

Deal Updates:

  1. On October 11, 2021, First Bancorp (FBNCreceived all required regulatory approvals to acquire Select Bancorp (SLCT).
  2. On October 12, 2021, Score Media and Gaming (SCR) announced that its shareholders voted in favour of the previously announced acquisition by Penn National Gaming (PENN).
  3. On October 12, 2021, Covanta Holding Corporation (CVA) announced that its stockholders voted to approve the previously announced acquisition of Covanta by EQT Infrastructure.
  4. On October 12, 2021, Cornerstone OnDemand (CSOD) announced that its stockholders voted to approve the previously announced acquisition by Clearlake Capital Group.
  5. On October 12, 2021, Pfizer (PFEvoluntarily withdrew its HSR Act filing, and expects to re-file such form on or about October 14, 2021, restarting the 30-day waiting period. The withdrawal and re-filing are procedural steps to provide the Federal Trade Commission with an additional 30 days to complete its review of the proposed Arrangement with Trillium Therapeutics (TRIL). The waiting period with respect to the notification and report forms under the HSR Act is scheduled to expire on or about November 15, 2021, unless extended or earlier terminated.
  6. On October 12, 2021, Itamar Medical (ITMR) announced that the special meeting of stockholders will be held on November 16, 2021.
  7. On October 14, 2021, Medallia (MDLA) announced that its shareholders voted to approve the acquisition of Medallia by Thoma Bravo.
  8. On October 15, 2021, BancorpSouth Bank (BXS) and Cadence Bancorporation (CADE) announced that their proposed merger has received final Federal Deposit Insurance Corporation approval.

Closed Deals:

  1. The acquisition of GP Strategies Corporation (GPX) by Learning Technologies Group on October 14, 2021. It took 91 days for this deal to be completed.
  2. The acquisition of Cornerstone OnDemand (CSOD) by Clearlake Capital Group on October 15, 2021. It took 71 days for this deal to be completed.
  3. The acquisition of Navios Maritime Acquisition Corporation (NNA) by Navios Maritime Partners (NMM) on October 15, 2021. It took 50 days for this deal to be completed.

Top 10 deals with largest spreads:

TEDU04/30/2021Kidedu Holdings Limited (N/A)$4.00$1.0712/31/2021273.83%1332.65%
MX03/26/2021South Dearborn Limited (N/A)$29.00$17.4912/31/202165.81%320.27%
CHNG01/06/2021UnitedHealth Group Incorporated (UNH)$25.75$20.6312/31/202124.82%120.78%
XONE08/11/2021Desktop Metal, Inc. (DM)$25.50$21.7812/31/202117.08%83.12%
AJRD12/20/2020Lockheed Martin Corporation (LMT)$51.00$43.912/31/202116.17%78.71%
JOBS06/21/2021Garnet Faith Limited (N/A)$79.05$68.2912/31/202115.76%76.68%
XLNX10/27/2020Advanced Micro Devices, Inc. (AMD)$193.23$167.1512/31/202115.60%75.93%
MSON07/29/2021Bioventus Inc. (BVS)$28.00$24.8912/31/202112.49%60.81%
SOLY05/10/2021Allergan Aesthetics (N/A)$22.60$20.4512/31/202110.51%51.17%
SJR03/15/2021Rogers Communications Inc. (RCI)$32.40$29.3406/30/202210.43%14.87%

List of all pending deals:

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

Target VolumeEstimated
Closing Date
+TEDU4/30/21Kidedu Holdings Limited (N/A)All Cash$230.6 M$4.00$1.07203,45812/31/21273.83%1350.66%
+MX3/26/21South Dearborn Limited (N/A)All Cash$1.4 B$29.00$17.49260,92512/31/2165.81%324.60%
+CHNG1/06/21UnitedHealth Group Incorporated (UNH)All Cash$13.28 B$25.75$20.63859,97012/31/2124.82%122.41%
+XONE8/11/21Desktop Metal, Inc. (DM)Special Conditions$418.26 M$25.50$21.78452,20512/31/2117.08%84.25%
+AJRD12/20/20Lockheed Martin Corporation (LMT)All Cash$3.79 B$51.00$43.9330,21412/31/2116.17%79.77%
+JOBS6/21/21Garnet Faith Limited (N/A)All Cash$3.63 B$79.05$68.29120,94912/31/2115.76%77.72%
+XLNX10/27/20Advanced Micro Devices, Inc. (AMD)All Stock$33.43 B$193.23$167.151,695,25512/31/2115.60%76.95%
+MSON7/29/21Bioventus Inc. (BVS)Special Conditions$518 million$28.00$24.8963,46512/31/2112.49%61.63%
+SOLY5/10/21Allergan Aesthetics (N/A)All Cash$550 M$22.60$20.45111,61812/31/2110.51%51.86%
+SJR3/15/21Rogers Communications Inc. (RCI)Special Conditions$26 B$32.40$29.34142,7726/30/2210.43%14.93%
+KDMN9/08/21Sanofi (SNY)All Cash$1.64 B$9.50$8.732,633,97012/31/218.82%43.50%
+SAFM8/09/21Cargill and Continental Grain Company (N/A)All Cash$4.49 B$203.00$186.7273,3931/31/228.73%30.35%
+COHR3/25/21II-VI Incorporated (IIVI)Cash Plus Stock$6.84 B$272.38$252.47162,79412/31/217.89%38.90%
+NFH8/04/21Unicorn II Holdings Limited (N/A)All Cash$2.09 billion$12.00$11.3530,24912/31/215.73%28.25%
+TRIL8/23/21Pfizer Inc. (PFE)All Cash$1.2 B$18.50$17.51,032,55412/31/215.71%28.19%
+FOE5/11/21Prince International Corporation (N/A)All Cash$2.1 B$22.00$20.86281,5743/31/225.47%12.16%
+MRLN4/19/21HPS Investment Partners LLC (N/A)All Cash$109.4 M$23.50$22.3133,2413/31/225.33%11.87%
+VNE10/04/21Qualcomm Incorporated (QCOM)All Cash$3.87 B$37.00$35.162,361,4906/30/225.23%7.49%
+FVCB7/14/21Blue Ridge Bankshares, Inc. (BRBS)All Stock$113.36 M$21.34$20.39168,8531/31/224.66%16.21%
+XLRN9/30/21Merck (MRK)All Cash$10.8 B$180.00$172.94408,42512/31/214.08%20.14%
+XENT8/06/21Medtronic plc (MDT)All Cash$1.1 billion$28.25$27.16149,2313/31/224.01%8.93%
+GWB9/16/21First Interstate BancSystem, Inc. (FIBK)All Stock$2 B$34.30$33.02449,3153/31/223.87%8.62%
+HRC9/02/21Baxter International Inc. (BAX)All Cash$12.4 B$156.00$151775,3393/31/223.31%7.37%
+GTS8/24/21GuideWell Mutual Holding Corporation (N/A)All Cash$665.93 M$36.00$34.9774,8846/30/222.95%4.22%
+HBMD7/13/21F.N.B. Corporation (FNB)All Stock$418 M$21.60$2178,6621/31/222.86%9.93%
+INFO11/30/20S&P Global (SPGI)All Stock$44 B$125.98$122.91,228,50112/31/212.51%12.38%
+ATH3/08/21Apollo Global Management, Inc. (APO)All Stock$6.01 B$77.47$75.75359,9371/31/222.26%7.87%
+FCCY7/12/21Lakeland Bancorp, Inc. (LBAI)All Stock$244.4 M$24.34$23.8311,7221/31/222.16%7.49%
+ITMR9/13/21ZOLL Medical Corporation (N/A)All Cash$399.11 M$31.00$30.3654,49112/31/212.11%10.40%
+KRA9/27/21DL Chemical Co., Ltd. (N/A)All Cash$2.5 B$46.50$45.55366,0746/30/222.09%2.99%
+ACBI7/23/21SouthState Corporation (SSB)All Stock$542 M$27.87$27.3564,1283/31/221.91%4.24%
+FBC4/26/21New York Community Bancorp, Inc. (NYCB)All Stock$2.6 B$55.61$54.57276,31312/31/211.90%9.39%
+MGP8/04/21VICI Properties Inc. (VICI)All Stock$17.2 billion$41.08$40.38832,8956/30/221.72%2.47%
+ISBC7/28/21Citizens Financial Group, Inc. (CFG)Cash Plus Stock$3.5 B$15.74$15.48881,7686/30/221.70%2.43%
+STFC7/12/21Liberty Mutual Holding Company Inc. (N/A)All Cash$2.48 B$52.00$51.1567,1023/31/221.66%3.70%
+GNOG8/09/21DraftKings Inc. (DKNG)All Stock$1.52 B$17.55$17.271,277,0553/31/221.62%3.60%
+ESBK10/04/21Community Bank System, Inc. (CBU)All Cash$82.8 M$23.10$22.747,0923/31/221.58%3.52%
+KSU9/15/21Canadian Pacific Railway Limited (CP)Cash Plus Stock$30.44 B$300.10$295.59687,88912/31/211.53%7.52%
+GSKY9/15/21The Goldman Sachs Group (GS)All Stock$2.24 B$12.18$124,005,1953/31/221.52%3.38%
+NUAN4/12/21Microsoft Corp (MSFT)All Cash$19.7 B$56.00$55.171,826,70212/31/211.50%7.42%
+ATC7/01/21MKS Instruments, Inc. (MKSI)Cash Plus Stock$6.5 B$24.19$23.83549,92412/31/211.49%7.36%
+MDP10/06/21IAC/InterActiveCorp and Gray Television, Inc. (IAC)All Cash$6.02 B$59.17$58.31,146,63712/31/211.49%7.36%
+WBT7/14/21Ali Holding S.r.l. (N/A)All Cash$4.8 B$24.00$23.65706,1571/31/221.48%5.14%
+ESXB6/03/21United Bankshares, Inc. (UBSI)All Stock$303.3 M$11.50$11.3422,35012/31/211.43%7.05%
+SPWH12/21/20The Great American Outdoors Group (N/A)All Cash$1.5 B$18.00$17.75446,30212/31/211.41%6.95%
+PNM10/21/20Avangrid, Inc. (AGR)All Cash$8.05 B$50.30$49.62503,50112/31/211.37%6.76%
+FRTA2/22/21Quikrete Holdings, Inc. (N/A)All Cash$2.74 B$24.00$23.68322,19212/31/211.35%6.67%
+RIVE7/01/21Mid Penn Bancorp, Inc. (MPB)All Stock$124.7 M$13.63$13.471,90012/31/211.22%6.00%
+PPD4/15/21Thermo Fisher Scientific Inc. (TMO)All Cash$20.9 B$47.50$46.951,114,09212/31/211.17%5.78%
+STL4/19/21Webster Financial Corporation (WBS)All Stock$5.12 B$26.38$26.081,336,95712/31/211.16%5.71%
+CLDB6/23/21Farmers National Banc Corp. (FMNB)All Stock$124 M$29.40$29.0715,60112/31/211.14%5.60%
+FMBI6/01/21Old National Bancorp (ONB)All Stock$2.86 B$19.33$19.15483,5801/31/220.93%3.23%
+INOV8/19/21Nordic Capital (N/A)All Cash$7.3 B$41.00$40.66924,6531/31/220.84%2.91%
+CXP9/07/21Pacific Investment Management Company LLC (N/A)All Cash$3.9 B$19.30$19.142,401,28512/31/210.84%4.12%
+ENBL2/17/21Energy Transfer LP (ET)All Stock$7.2 B$8.59$8.52293,75612/31/210.78%3.84%
+LMRK8/23/21Landmark Dividend LLC (N/A)All Cash$997.25 M$16.50$16.3893,85512/31/210.73%3.61%
+RAVN6/21/21CNH Industrial N.V (CNHI)All Cash$2.1 B$58.00$57.58236,70712/31/210.73%3.60%
+UFS5/11/21Paper Excellence (N/A)All Cash$3.02 B$55.50$55.1218,26012/31/210.73%3.58%
+RBNC7/15/21United Community Banks, Inc. (UCBI)All Stock$517 M$33.42$33.1953,0363/31/220.70%1.57%
+CVA7/14/21EQT Infrastructure (N/A)All Cash$5.35 B$20.25$20.12699,50912/31/210.65%3.19%
+DSPG8/30/21Synaptics Incorporated (SYNA)All Cash$399.78 M$22.00$21.8690,63412/31/210.64%3.16%
+KOR9/13/21AngloGold Ashanti Limited (N/A)All Cash$450 M$3.29$3.2775,6543/31/220.61%1.36%
+PBCT2/22/21M&T Bank Corporation (MTB)All Stock$7.6 B$17.83$17.732,318,25812/31/210.58%2.87%
+EBSB4/23/21Independent Bank Corp. (INDB)All Stock$1.15 B$22.12$21.99210,39512/31/210.57%2.82%
+ANAT8/09/21Brookfield Asset Management Reinsurance Partners Ltd. (BAMR)All Cash$5.1 B$190.00$189.0239,6036/30/220.52%0.74%
+CIT10/16/20First Citizens BancShares, Inc. (FCNCA)All Stock$2.42 B$52.96$52.7362,7913/31/220.50%1.12%
+ECHO9/10/21The Jordan Company, L.P. (N/A)All Cash$939.64 M$48.25$48.02480,91012/31/210.48%2.36%
+UMPQ10/12/21Columbia Banking System, Inc. (COLB)All Stock$4.5 B$20.73$20.642,803,8976/30/220.45%0.65%
+VER4/29/21Realty Income Corporation (O)All Stock$17.66 B$49.11$48.92,922,40212/31/210.43%2.12%
+MGLN1/04/21Centene Corporation (CNC)All Cash$2.2 B$95.00$94.63209,23812/31/210.39%1.93%
+ADMS10/11/21Supernus Pharmaceuticals, Inc. (SUPN)Special Conditions$460.12 M$8.10$8.07946,8111/31/220.37%1.29%
+BMTC3/10/21WSFS Financial Corporation (WSFS)All Stock$976.4 M$49.19$49.0191,02612/31/210.36%1.76%
+VEI8/10/21Chesapeake Energy Corporation (CHK)Cash Plus Stock$2.2 B$16.80$16.74264,24312/31/210.36%1.76%
+CADE4/12/21BancorpSouth Bank (BXS)Cash Plus Stock$2.7 B$22.24$22.163,939,91812/31/210.34%1.69%
+CNBKA4/07/21Eastern Bankshares, Inc. (EBC)All Cash$642 M$115.28$115.056,93312/31/210.20%0.99%
+CAI6/17/21Mitsubishi HC Capital Inc. (N/A)All Cash$2.9 B$56.00$55.89146,39612/31/210.20%0.97%
+PMBC3/23/21Banc of California (BANC)All Stock$235 M$9.53$9.5135,63610/18/210.16%0.00%
+MDLA7/26/21Thoma Bravo (N/A)All Cash$6.4 B$34.00$33.954,682,19212/31/210.15%0.73%
+SIC8/09/21Sun Capital Partners, Inc. (N/A)All Cash$411 M$14.50$14.4873,77210/31/210.14%3.88%
+JMP9/08/21Citizens Financial Group, Inc. (CFG)All Cash$149 M$7.50$7.4912,70912/31/210.13%0.66%
+SCR8/05/21Penn National Gaming, Inc. (PENN)Cash Plus Stock$2 B$35.63$35.6571,5853/31/220.09%0.20%
+RPAI7/16/21Kite Realty Group Trust (KRG)All Stock$4.96 B$13.61$13.611,408,57212/31/210.02%0.09%
+QADA6/28/21Thoma Bravo (N/A)All Cash$2 B$87.50$87.54167,68212/31/21-0.05%-0.23%
+SC8/24/21Santander Holdings USA, Inc. (N/A)All Cash$12.7 B$41.50$41.631,240,67712/31/21-0.31%-1.54%
+TPG10/05/21Stonepeak (N/A)All Cash$6.2 B$17.00$17.10N/A12/31/21-0.58%-2.88%
+ICBK6/22/21Nicolet Bankshares, Inc. (NCBS)All Stock$219 M$36.21$36.4622212/31/21-0.70%-3.43%
+XOG5/10/21Bonanza Creek Energy, Inc. (BCEI)All Stock$2.6 B$62.74$63.25160,21011/30/21-0.81%-6.90%
+SLCT6/01/21First Bancorp (FBNC)All Stock$314.3 M$18.72$18.88934,07212/31/21-0.85%-4.21%
+KL9/28/21Agnico Eagle Mines Limited (AEM)All Stock$9.53 B$45.57$45.981,384,8063/31/22-0.89%-1.98%
+SVBI3/03/21Shore Bancshares, Inc. (SHBI)Cash Plus Stock$146 M$12.74$12.94,39012/31/21-1.26%-6.20%
+AZPN10/11/21Emerson Electric Co. (EMR)Special Conditions$12.34 B$160.00$163.51576,0916/30/22-2.15%-3.07%
+FLXN10/11/21Pacira BioSciences, Inc. (PCRX)Special Conditions$570.84 M$8.50$9.441,073,27512/31/21-9.96%-49.12%


We have been seeing a significant increase in the number of potential deals in the works announced in the past few months and it is interesting to see some of them becoming successful in a short period of time. The highlight of our new Mid-Month Update was Healthcare Trust of America (HTA). We added HTA to our list of potential deals on October 6, 2021. We wrote the following in our Mid-Month Update, with respect to the success rate of potential deals,

The number of deals in the DITW tool have more than doubled since we last analyzed the data and there are 477 deals in the database now. Interestingly, the success rate has improved to 43.4% and potential deals classified as “unsolicited bid” had the highest success rate with more than 51% of them ending up with a definitive merger agreement.

Disclaimer: I have long positions in Nuance Communications (NUAN), Change Healthcare (CHNG) and Trillium Therapeutics (TRIL). I also have put options in Change Healthcare. 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.