Merger Arbitrage Mondays – Ericsson To Acquire Vonage Holdings

  • November 29, 2021

Merger activity decreased last week with two new deals announced and five deals completed. There have been 22 deals announced in the month of November accounting for total deal value of over $69 billion.

Vonage Holdings (VG) was founded in the year 1998 by Jeff Pulver as a Voice over IP (VOIP) exchange. It was originally called The company went on to become a VOIP service provider and changed its name to Vonage Holdings in 2001. Before going public in 2006, the company started offering subscription service in the United States, then expanded to Canada in 2004 and the United Kingdom in 2005. After several acquisitions starting 2013, Vonage refocused its business from a home phone provider to a global business cloud communications provider. As someone who once purchased Vonage shares in the low single digits, this transformation from a home phone provider to business services was key to Vonage’s recent success. I did well with that investment but would have done even better had I held on for a few more years.

Vonage’s products include Comunication APIs, Unified Communications and Contact Centers. The cloud-based Vonage Communications Platform (VCP) is the flagship of the company. VCP’s total revenue represented 80% of VG’s total consolidated revenue for Q3 2021, up from 74% a year ago.

(Source: Vonage Holdings Q3, 2021 Investor Presentation)

We added Vonage Holdings to our list of potential deals on August 31, 2021, when Bloomberg reported that activist investor Jana Partners had called on Vonage Holdings (VG) to hire advisers to explore strategic alternatives, including a possible sale of all or parts of the telecommunications services company. The price of Vonage, after this announcement was $14.10. On November 22, 2021, Ericsson entered into an agreement to acquire Vonage for $6.2 billion or $21 per share in cash, representing a premium of 28% to Vonage’s closing share price on November 19, 2021 of $16.37 per share. Börje Ekholm, President and CEO of Ericsson, said:

“The core of our strategy is to build leading mobile networks through technology leadership. This provides the foundation to build an enterprise business. The acquisition of Vonage is the next step in delivering on that strategic priority.”

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 6 SPAC IPOs filed and 2 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.

  1. MANSCAPED™ men’s lifestyle consumer brand and Bright Lights Acquisition (BLTS) have entered into a definitive business combination agreement that will result in MANSCAPED becoming a public company.
  2. Benessere Capital Acquisition (BENE) and eCombustible Energy an innovator and provider of customizable hydrogen-based fuel for thermal industrial applications, announced that the companies entered into a definitive merger agreement.

Weekly Spread Changes:

The table below shows weekly spread changes between November 19 and November 26, 2021.

Company Quote
Last Week
Spread Change
AZPN145.16Emerson Electric Co. (EMR)90.3110.22%3.59%6.63%Special Conditions
MX18.3South Dearborn Limited (N/A)58.47%53.85%4.62%All Cash
MNTV20.9Zendesk (ZEN)94.271.49%-0.99%2.48%All Stock
SOLY20.82Allergan Aesthetics (N/A)8.55%6.50%2.05%All Cash
SJR28.75Rogers Communications Inc. (RCI)45.8612.70%10.92%1.78%Special Conditions
PVG13.76Newcrest Mining Limited (NCMGY)17.19951.05%2.79%-1.74%All Stock
RIVE15.8379Mid Penn Bancorp, Inc. (MPB)32.45-0.98%1.00%-1.98%All Stock
XLNX223.95Advanced Micro Devices, Inc. (AMD)154.8119.13%21.26%-2.13%All Stock
ICBK35.6Nicolet Bankshares, Inc. (NCBS)71.13-4.09%-1.37%-2.72%All Stock
JOBS54.19Garnet Faith Limited (N/A)45.88%57.06%-11.18%All Cash

Deal Statistics:

Total Number of Deals Closed in 2021175
Total Number of Deals Not Completed in 202113
Total Number of Pending Deals
Cash Deals53
Stock Deals31
Stock & Cash Deals6
Special Conditions4
Total Number of Pending Deals94
Total Deal Size$1.01 trillion

New Deals:

  1. The acquisition of Vonage Holdings (VG) by Ericsson (ERIC) for $6.2 billion or $21 per share in cash. We added VG as a potential deal  to the Deals in the Works section on August 31, 2021, and the price after the news of the potential deal came out was $14.10.
  2. The acquisition of Goodrich Petroleum Corporation (GDP) by Paloma Partners VI Holdings for $480 million or $23 per share in cash.

Deal Updates:

  1. On November 18, 2021, Mid Penn Bancorp (MPB) and Riverview Financial Corporation (RIVE) announced that shareholders from both Mid Penn and Riverview overwhelmingly approved Mid Penn’s proposed acquisition of Riverview.
  2. On November 23, 2021, Supernus Pharmaceuticals (SUPN) announced that the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) with respect to Supernus’ proposed acquisition of Adamas Pharmaceuticals (ADMS) has expired.
  3. On November 23, 2021, Canadian Pacific Railway Limited (CP) and Kansas City Southern (KSU) announced that the Surface Transportation Board has accepted the joint CP-KCS merger application as complete.
  4. On November 26, 2021, Canadian Pacific Railway Limited (CP) and Kansas City Southern (KSU) announced that they have received the required regulatory pre-transaction control approvals from the Mexican Federal Economic Competition Commission and the Mexican Federal Telecommunications Institute for the previously announced proposed combination of KCS and CP.
  5. On November 26, 2021, Kirkland Lake Gold (KL) announced that at a special meeting of shareholders held earlier, the company’s shareholders voted in favor of the merger with Agnico Eagle Mines Limited (AEM).

Closed Deals:

  1. The acquisition of CAI International (CAI) by Mitsubishi HC Capital on November 22, 2021. It took 158 days for this deal to be completed.
  2. The acquisition of Acceleron Pharma (XLRN) by Merck (MRK) on November 22, 2021. It took 53 days for this deal to be completed.
  3. The acquisition of Echo Global Logistics (ECHO) by The Jordan Company on November 23, 2021. It took 74 days for this deal to be completed.
  4. The acquisition of Adamas Pharmaceuticals (ADMS) by Supernus Pharmaceuticals (SUPN) on November 24, 2021. It took 44 days for this deal to be completed.
  5. The acquisition of Inovalon Holdings (INOV) by Nordic Capital on November 24, 2021. It took 97 days for this deal to be completed.

Top 10 deals with largest spreads:

MX03/26/2021South Dearborn Limited (N/A)$29.00$18.312/31/202158.47%666.92%
JOBS06/21/2021Garnet Faith Limited (N/A)$79.05$54.1912/31/202145.88%523.27%
CHNG01/06/2021UnitedHealth Group Incorporated (UNH)$25.75$20.7302/28/202224.22%97.13%
XLNX10/27/2020Advanced Micro Devices, Inc. (AMD)$266.80$223.9512/31/202119.13%218.24%
AJRD12/20/2020Lockheed Martin Corporation (LMT)$51.00$43.2603/31/202217.89%53.53%
SJR03/15/2021Rogers Communications Inc. (RCI)$32.40$28.7506/30/202212.70%21.76%
AZPN10/11/2021Emerson Electric Co. (EMR)$160.00$145.1606/30/202210.22%17.52%
NFH08/04/2021Unicorn II Holdings Limited (N/A)$12.00$10.9712/31/20219.39%107.10%
STXB11/19/2021Simmons First National Corporation (SFNC)$30.28$27.7906/30/20228.95%15.34%
SAFM08/09/2021Cargill and Continental Grain Company (N/A)$203.00$186.6901/31/20228.74%50.62%

List of all pending deals:

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

Target VolumeEstimated
Closing Date
+MX3/26/21South Dearborn Limited (N/A)All Cash$1.4 B$29.00$18.3224,14212/31/2158.47%666.92%
+JOBS6/21/21Garnet Faith Limited (N/A)All Cash$3.63 B$79.05$54.19139,41012/31/2145.88%523.27%
+CHNG1/06/21UnitedHealth Group Incorporated (UNH)All Cash$13.28 B$25.75$20.731,234,5512/28/2224.22%97.13%
+XLNX10/27/20Advanced Micro Devices, Inc. (AMD)All Stock$33.43 B$266.80$223.951,531,57212/31/2119.13%218.24%
+AJRD12/20/20Lockheed Martin Corporation (LMT)All Cash$3.79 B$51.00$43.26366,9483/31/2217.89%53.53%
+SJR3/15/21Rogers Communications Inc. (RCI)Special Conditions$26 B$32.40$28.75196,2036/30/2212.70%21.76%
+AZPN10/11/21Emerson Electric Co. (EMR)Special Conditions$12.34 B$160.00$145.16293,2086/30/2210.22%17.52%
+NFH8/04/21Unicorn II Holdings Limited (N/A)All Cash$2.09 billion$12.00$10.97108,48512/31/219.39%107.10%
+STXB11/19/21Simmons First National Corporation (SFNC)All Stock$581 M$30.28$27.7958,2726/30/228.95%15.34%
+SAFM8/09/21Cargill and Continental Grain Company (N/A)All Cash$4.49 B$203.00$186.6977,1811/31/228.74%50.62%
+SOLY5/10/21Allergan Aesthetics (N/A)All Cash$550 M$22.60$20.8252,1423/31/228.55%25.58%
+COHR3/25/21II-VI Incorporated (IIVI)Cash Plus Stock$6.84 B$277.05$258.354,72312/31/217.26%82.79%
+PTRS11/04/21OceanFirst Financial Corp. (OCFC)Special Conditions$186 M$10.38$9.6856,7996/30/227.18%12.30%
+CSPR11/15/21Durational Capital Management LP (N/A)All Cash$318.49 M$6.90$6.55773,9623/31/225.34%15.99%
+VNE10/04/21Qualcomm Incorporated (QCOM)All Cash$3.87 B$37.00$35.221,065,3066/30/225.05%8.66%
+XENT8/06/21Medtronic plc (MDT)All Cash$1.1 billion$28.25$26.95115,5493/31/224.82%14.43%
+SPWH12/21/20The Great American Outdoors Group (N/A)All Cash$1.5 B$18.00$17.2389,21412/31/214.65%53.05%
+GSS11/01/21Chifeng Jilong Gold Mining Co., Ltd. (N/A)All Cash$470 M$3.91$3.751,385,4721/31/224.27%24.72%
+FBC4/26/21New York Community Bancorp, Inc. (NYCB)All Stock$2.6 B$49.79$47.97235,33112/31/213.79%43.21%
+KOR9/13/21AngloGold Ashanti Limited (AU)All Cash$450 M$3.29$3.1755,0383/31/223.79%11.33%
+NPTN11/04/21Lumentum Holdings Inc. (LITE)All Cash$745.24 M$16.00$15.44518,41212/31/223.63%3.33%
+FOE5/11/21Prince International Corporation (N/A)All Cash$2.1 B$22.00$21.33436,8583/31/223.14%9.40%
+ISBC7/28/21Citizens Financial Group, Inc. (CFG)Cash Plus Stock$3.5 B$15.88$15.421,260,8046/30/223.00%5.14%
+MILE11/08/21Lemonade (LMND)All Stock$201.47 M$2.78$2.72,550,3586/30/222.86%4.90%
+TSC10/20/21Raymond James Financial, Inc. (RJF)Cash Plus Stock$1.1 B$30.64$29.79141,2486/30/222.84%4.86%
+HBMD7/13/21F.N.B. Corporation (FNB)All Stock$418 M$21.64$21.1138,9881/31/222.49%14.44%
+ROG11/02/21DuPont de Nemours, Inc. (DD)All Cash$5.2 B$277.00$270.35286,3516/30/222.46%4.22%
+MRLN4/19/21HPS Investment Partners LLC (N/A)All Cash$109.4 M$23.50$22.9817,4933/31/222.26%6.77%
+GWB9/16/21First Interstate BancSystem, Inc. (FIBK)All Stock$2 B$34.20$33.46207,0383/31/222.20%6.59%
+FVCB7/14/21Blue Ridge Bankshares, Inc. (BRBS)All Stock$113.36 M$20.85$20.41,9731/31/222.19%12.68%
+OMP10/26/21Crestwood Equity Partners LP (CEQP)All Stock$1.8 B$23.55$23.05105,8151/31/222.17%12.59%
+PBCT2/22/21M&T Bank Corporation (MTB)All Stock$7.6 B$18.17$17.823,681,25812/31/211.97%22.46%
+UMPQ10/12/21Columbia Banking System, Inc. (COLB)All Stock$4.5 B$19.48$19.111,269,5716/30/221.92%3.29%
+CIT10/16/20First Citizens BancShares, Inc. (FCNCA)All Stock$2.42 B$51.84$50.96550,3603/31/221.73%5.17%
+RBNC7/15/21United Community Banks, Inc. (UCBI)All Stock$517 M$34.08$33.5226,6863/31/221.68%5.02%
+WBT7/14/21Ali Holding S.r.l. (N/A)All Cash$4.8 B$24.00$23.61536,3371/31/221.65%9.57%
+ENBL2/17/21Energy Transfer LP (ET)All Stock$7.2 B$7.60$7.48681,01212/31/211.58%17.99%
+MCFE11/08/21Investor Group comprised of Advent, Permira, Crosspoint Capital, CPP Investments, GIC and ADIA (N/A)All Cash$14 B$26.00$25.6822,8926/30/221.56%2.68%
+LMRK8/23/21Landmark Dividend LLC (N/A)All Cash$997.25 M$16.50$16.2534,53112/31/211.54%17.55%
+VG11/22/21Ericsson (ERIC)All Cash$6.2 B$21.00$20.694,206,0786/30/221.50%2.57%
+GSKY9/15/21The Goldman Sachs Group (GS)All Stock$2.24 B$11.68$11.51482,9343/31/221.49%4.46%
+MNTV10/28/21Zendesk (ZEN)All Stock$4.21 B$21.21$20.9660,1456/30/221.49%2.55%
+LEVL11/04/21First Merchants Corporation (FRME)Cash Plus Stock$323.5 M$39.26$38.6910,6836/30/221.48%2.53%
+CONE11/15/21KKR and Global Infrastructure Partners (N/A)All Cash$15 B$90.50$89.242,360,6926/30/221.41%2.42%
+PNM10/21/20Avangrid, Inc. (AGR)All Cash$8.05 B$50.30$49.62353,22512/31/211.37%15.63%
+MGP8/04/21VICI Properties Inc. (VICI)All Stock$17.2 billion$37.99$37.49762,2406/30/221.33%2.28%
+GTS8/24/21GuideWell Mutual Holding Corporation (N/A)All Cash$665.93 M$36.00$35.53123,5156/30/221.32%2.27%
+INFO11/30/20S&P Global (SPGI)All Stock$44 B$129.00$127.321,075,46812/31/211.32%15.01%
+KRA9/27/21DL Chemical Co., Ltd. (N/A)All Cash$2.5 B$46.50$45.9159,0596/30/221.31%2.24%
+GNOG8/09/21DraftKings Inc. (DKNG)All Stock$1.52 B$13.15$12.99353,9403/31/221.27%3.79%
+ATC7/01/21MKS Instruments, Inc. (MKSI)Cash Plus Stock$6.5 B$24.76$24.45512,65212/31/211.26%14.35%
+PAE10/25/21Amentum Government Services Holdings LLC (N/A)All Cash$1.9 B$10.05$9.93765,1153/31/221.21%3.62%
+NUAN4/12/21Microsoft Corp (MSFT)All Cash$19.7 B$56.00$55.342,084,87912/31/211.19%13.60%
+ITMR9/13/21ZOLL Medical Corporation (N/A)All Cash$399.11 M$31.00$30.64103,65912/31/211.17%13.40%
+STFC7/12/21Liberty Mutual Holding Company Inc. (N/A)All Cash$2.48 B$52.00$51.485,5513/31/221.17%3.49%
+MNR11/05/21Industrial Logistics Properties Trust (ILPT)All Cash$3.72 B$21.00$20.761,161,1466/30/221.16%1.98%
+ESBK10/04/21Community Bank System, Inc. (CBU)All Cash$82.8 M$23.10$22.841953/31/221.14%3.41%
+CPLG11/08/21Highgate and Cerberus Capital Management, L.P. (N/A)Special Conditions$1.5 B$15.65$15.481,135,4253/31/221.10%3.29%
+PVG11/09/21Newcrest Mining Limited (NCMGY)All Stock$2.8 B$13.90$13.761,085,1533/31/221.05%3.13%
+CXP9/07/21Pacific Investment Management Company LLC (N/A)All Cash$3.9 B$19.30$19.121,867,01812/31/210.94%10.74%
+FRTA2/22/21Quikrete Holdings, Inc. (N/A)All Cash$2.74 B$24.00$23.7998,14612/31/210.88%10.07%
+DWSN10/25/21Wilks Brothers, LLC (N/A)All Cash$18.56 M$2.34$2.3243,48512/31/210.86%9.83%
+KL9/28/21Agnico Eagle Mines Limited (AEM)All Stock$9.53 B$44.27$43.921,134,0933/31/220.80%2.38%
+TGP10/05/21Stonepeak (N/A)All Cash$6.2 B$17.00$16.88614,79612/31/210.71%8.11%
+DRNA11/18/21Novo Nordisk (NVO)All Cash$2.09 B$38.25$37.9910,938,54712/31/210.68%7.81%
+FMBI6/01/21Old National Bancorp (ONB)All Stock$2.86 B$20.77$20.64539,0981/31/220.62%3.58%
+BMTC3/10/21WSFS Financial Corporation (WSFS)All Stock$976.4 M$45.77$45.5166,40412/31/210.58%6.62%
+DVD11/09/21Speedway Motorsports, LLC (N/A)All Cash$94.69 M$3.61$3.5921,29412/31/210.56%6.35%
+ACBI7/23/21SouthState Corporation (SSB)All Stock$542 M$28.10$27.9580,8233/31/220.53%1.58%
+IHC11/09/21Geneve Holdings, Inc. (N/A)All Cash$813.9 M$57.00$56.712,25912/31/210.53%6.04%
+STL4/19/21Webster Financial Corporation (WBS)All Stock$5.12 B$25.80$25.681,595,54112/31/210.46%5.26%
+FCCY7/12/21Lakeland Bancorp, Inc. (LBAI)All Stock$244.4 M$24.72$24.625,8601/31/220.42%2.44%
+MGLN1/04/21Centene Corporation (CNC)All Cash$2.2 B$95.00$94.6580,08912/31/210.37%4.22%
+ANAT8/09/21Brookfield Asset Management Reinsurance Partners Ltd. (BAMR)All Cash$5.1 B$190.00$189.367,7626/30/220.37%0.63%
+PPD4/15/21Thermo Fisher Scientific Inc. (TMO)All Cash$20.9 B$47.50$47.35669,83512/31/210.32%3.61%
+GDP11/22/21Paloma Partners VI Holdings, LLC (N/A)All Cash$480 M$23.00$22.93395,29712/31/210.31%3.48%
+ATH3/08/21Apollo Global Management, Inc. (APO)All Stock$6.01 B$82.43$82.18725,2361/31/220.30%1.76%
+HRC9/02/21Baxter International Inc. (BAX)All Cash$12.4 B$156.00$155.55377,6213/31/220.29%0.87%
+MDP10/06/21IAC/InterActiveCorp and Gray Television, Inc. (IAC)All Cash$6.02 B$59.17$59.00755,35712/01/210.29%52.58%
+ESXB6/03/21United Bankshares, Inc. (UBSI)All Stock$303.3 M$11.49$11.4661,02512/31/210.28%3.25%
+KSU9/15/21Canadian Pacific Railway Limited (CP)Cash Plus Stock$30.44 B$295.66$294.93669,51612/31/210.25%2.82%
+DSPG8/30/21Synaptics Incorporated (SYNA)All Cash$399.78 M$22.00$21.97103,23712/02/210.14%16.61%
+RAVN6/21/21CNH Industrial N.V (CNHI)All Cash$2.1 B$58.00$57.97249,29312/31/210.05%0.59%
+CVA7/14/21EQT Infrastructure (N/A)All Cash$5.35 B$20.25$20.241,454,46512/31/210.05%0.56%
+UFS5/11/21Paper Excellence (N/A)All Cash$3.02 B$55.50$55.48581,35912/31/210.04%0.41%
+FTSI10/22/21ProFrac Holdings (N/A)All Cash$407.5 M$26.52$26.52117,4723/31/220.00%0.00%
+ZIXI11/08/21OpenText (N/A)All Cash$860 M$8.50$8.5793,4102/06/220.00%0.00%
+COR11/15/21American Tower Corporation (AMT)All Cash$10.1 B$170.00$170.71611,28112/31/21-0.42%-4.74%
+PSXP10/27/21Phillips 66 (PSX)All Stock$14.5 B$34.63$34.79873,4703/31/22-0.47%-1.42%
+RIVE7/01/21Mid Penn Bancorp, Inc. (MPB)All Stock$124.7 M$15.68$15.848,59112/31/21-0.99%-11.30%
+SC8/24/21Santander Holdings USA, Inc. (N/A)All Cash$12.7 B$41.50$41.97201,70712/31/21-1.12%-12.77%
+ABTX11/10/21CBTX, Inc. (CBTX)All Stock$1.5 B$41.19$42.8159,0546/30/22-3.78%-6.48%
+ICBK6/22/21Nicolet Bankshares, Inc. (NCBS)All Stock$219 M$34.14$35.683512/31/21-4.09%-46.70%
+RRD11/03/21Atlas Holdings LLC (N/A)All Cash$2.1 B$8.52$9.29675,1906/30/22-8.29%-14.20%


Arbitrageurs have been concerned about regulatory approvals in recent months and spreads on several deals reflected these concerns. These deals with large spreads also provided attractive opportunities to investors that were willing to go up the risk spectrum. One of these deals was the acquisition of Kadmon Holdings by Sanofi (SNY), which closed just 62 days after it was announced and had a wide spread of 8.82% (43% annualized) less than three weeks before the deal closed. While cross-border deals and deals in the semiconductor industry will continue to face a lot of regulatory scrutiny, it might be a good idea to look at the broader deal universe especially at a time when the market is offering few opportunities on the long side.

Disclaimer: I have long positions in Magnachip Semiconductor (MX), Nuance Communications (NUAN) and Change Healthcare (CHNG). 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.