Merger Arbitrage Mondays – Citrix To Be Acquired By Vista And Elliott

Merger activity remained steady last week with two new deals announced and five deals completed.

Founded in 1989 and headquartered in Fort Lauderdale, Florida, Citrix Systems (CTXS) is a multinational cloud computing and virtualization technology company. The company provides server, application and desktop virtualization, networking, software as a service (SaaS), and cloud computing technologies. Citrix began its operations by developing remote access products for Microsoft operating systems, licensing source code from Microsoft, and has had a long-standing partnership with the company.

The products offered by Citrix were extensively relied upon during the pandemic as businesses sought options to keep remote workforces connected to their central operations. The company, however, fell deeply out of favor last year.

(Source: Citrix website)

We added Citrix as a potential deal in the works on September 15, 2021, when Bloomberg reported that the company was working with advisers and was weighing whether to sell itself, after experiencing a sharp drop in its share price last year. The price of Citrix at the time of this announcement was $112.47. Citrix previously tried to sell itself in 2017, with private equity firms Bain Capital, Carlyle Group and Thoma Bravo as potential bidders at that time.

Elliott Investment Management and Vista Equity Partners started considering a joint bid for Citrix around the end of last year and reached a definitive agreement to acquire the company on January 31, 2022 in an all cash deal valued at $16.5 billion or $104 per share in cash, representing a premium of 30%. According to the agreement, Vista and Evergreen (an affiliate of Elliott) intend to combine Citrix and TIBCO Software, one of Vista’s portfolio companies. According to data compiled by Bloomberg, this deal values Citrix at about 24.8 times its TTM EBITA.

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. On February 1, 2022,  Cedar Fair (FUN) received an unsolicited non-binding proposal from SeaWorld Entertainment (SEAS) for $3.4 billion or $60 per share. Six Flags Entertainment (SIX) could be a potential bidder for Cedar as well. Back in 2019, Cedar had turned down a $70 per share deal from Six Flags.

SPAC Arbitrage

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

  1. Kalera AS, a preeminent leafy green vertical farming company and Agrico Acquisition Corp. (RICOentered into a definitive merger agreement.
  2. Comera Life Sciences, a company which is developing a new generation of bio-innovative biologic medicines to improve patient access, safety, and convenience, and OTR Acquisition Corp. (OTRAentered into a business combination agreement.
  3. MariaDB Corporation Ab, an open source database software company announced its intention to become a publicly listed company with Angel Pond Holdings Corporation (POND).
  4. Calidi Biotherapeutics, a clinical-stage biotechnology company that is pioneering the development of cell-based delivery of oncolytic viruses, and Edoc Acquisition (ADOC), a blank check company organized to acquire or merge with one or more businesses, have entered into a definitive merger agreement.
  5. Wag Labs, an American pet services marketplace company powering a mobile-first technology platform that enables on-demand and scheduled dog walking, training, and other pet care services, and CHW (CHWAannounced the signing of a definitive business combination agreement.

Weekly Spread Changes:

The table below shows weekly spread changes between January 28 and February 4, 2022.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
AJRD 37.05 Lockheed Martin Corporation (LMT) 389.33 37.65% 32.67% 4.98% All Cash
PVG 13.7 Newcrest Mining Limited (NCMGY) 16.06 -5.23% -9.76% 4.53% All Stock
MNTV 17.05 Zendesk (ZEN) 97.68 28.90% 25.38% 3.52% All Stock
JOBS 48.18 Garnet Faith Limited (N/A) 64.07% 60.67% 3.40% All Cash
RRD 10.7 Chatham Asset Management, LLC (N/A) 1.40% -1.45% 2.85% All Cash
NSEC 15.892 VR Insurance Holdings, Inc. (N/A) 2.88% 4.47% -1.59% All Cash
AZPN 144.83 Emerson Electric Co. (EMR) 95.38 10.47% 12.40% -1.93% Special Conditions
PNM 45.45 Avangrid, Inc. (AGR) 45.5 10.67% 13.06% -2.39% All Cash
ZNGA 9.11 Take-Two Interactive Software, Inc. (TTWO) 175 8.23% 13.73% -5.50% Special Conditions
NES 2.32 Select Energy Services, Inc. (WTTR) 7.39 -18.74% 2.20% -20.94% All Stock

Deal Statistics:

Total Number of Deals Closed in 2022 19
Total Number of Deals Not Completed in 2022 1
Total Number of Pending Deals
Cash Deals 40
Stock Deals 20
Stock & Cash Deals 7
Special Conditions 8
Total Number of Pending Deals 75
Total Deal Size $562.43 billion

New Deals:

  1. The acquisition of Citrix Systems (CTXS) by Vista Equity Partners and Elliott Investment Management for $16.5 billion or $104 per share in cash.
  2. The acquisition of SOC Telemed (TLMD) by Patient Square Capital for $106.42 million or $3.00 per share in cash.

Deal Updates:

  1. On January 31, 2022, shareholders of CMC Materials (CCMPapproved the company’s merger with Entegris (ENTG) at a special meeting of shareholders.
  2. January 31, 2022: According to Bloomberg, The U.S. antitrust review of Microsoft Corp’s (MSFT) proposed acquisition of Activision Blizzard (ATVI) will be handled by the Federal Trade Commission (FTC).
  3. On February 1, 2022, shareholders in the pay-per-mile auto insurer, Metromile (MILEgave their approval to the impending acquisition of the company by Lemonade (LMND).
  4. On February 1, 2022, CyrusOne (CONE) announced that its stockholders approved the previously announced merger pursuant to which KKR and Global Infrastructure Partners, will acquire all outstanding shares of common stock of the Company.
  5. On February 1, 2022, NeoPhotonics stockholders approved the merger agreement under which Lumentum Holdings (LITE) will acquire NeoPhotonics (NPTN).
  6. On February 1, 2022, Agnico Eagle Mines Limited (AEM) and Kirkland Lake Gold (KL) announced that approval has been received from Australia’s Foreign Investment Review Board regarding the proposed merger of equals between Agnico Eagle and Kirkland Lake Gold.
  7. On February 2, 2022,  R. R. Donnelley & Sons Company (RRD) announced that the unsolicited non-binding and conditional “Alternative Acquisition Proposal” from a strategic party has been withdrawn.
  8. On February 2, 2022, shareholders of Arena Pharmaceuticals (ARNAapproved the company’s merger with Pfizer (PFE) at a special meeting of shareholders.

Closed Deals:

  1. The acquisition of Santander Consumer USA Holdings (SC) by Santander Holdings USA on January 31, 2022. It took 160 days for this deal to be completed.
  2. The acquisition of Great Western Bancorp (GWB) by First Interstate BancSystem (FIBK) on February 1, 2022. It took 138 days for this deal to be completed.
  3. The acquisition of Oasis Midstream Partners (OMP) by Crestwood Equity Partners (CEQP) on February 1, 2022. It took 98 days for this deal to be completed.
  4. The acquisition of Triple-S Management Corporation (GTS) by GuideWell Mutual Holding Corporation on February 1, 2022. It took 161 days for this deal to be completed.
  5. The acquisition of Sterling Bancorp (STL) by Webster Financial Corporation (WBS) on February 1, 2022. It took 288 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
JOBS 06/21/2021 Garnet Faith Limited (N/A) $79.05 $48.18 03/31/2022 64.07% 441.25%
AJRD 12/20/2020 Lockheed Martin Corporation (LMT) $51.00 $37.05 03/31/2022 37.65% 259.30%
CHNG 01/06/2021 UnitedHealth Group Incorporated (UNH) $25.75 $19.76 06/30/2022 30.31% 76.84%
MNTV 10/28/2021 Zendesk (ZEN) $21.98 $17.05 06/30/2022 28.90% 73.26%
TMX 12/14/2021 Rentokil Initial plc (RTOKY) $55.00 $42.99 12/31/2022 27.94% 31.09%
ATVI 01/18/2022 Microsoft Corporation (MSFT) $95.00 $79.25 03/31/2023 19.87% 17.35%
BRG 12/20/2021 Blackstone Real Estate (N/A) $29.85 $26.52 06/30/2022 12.56% 31.83%
SAFM 08/09/2021 Cargill and Continental Grain Company (N/A) $203.00 $181.67 01/31/2022 11.74% -714.25%
PNM 10/21/2020 Avangrid, Inc. (AGR) $50.30 $45.45 06/30/2022 10.67% 27.05%
AZPN 10/11/2021 Emerson Electric Co. (EMR) $160.00 $144.83 06/30/2022 10.47% 26.55%

List of all pending deals:

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

Target Announced
Date
Acquirer Deal
Type
Closing
Value
Deal
Price
Last
Price
Target Volume Estimated
Closing Date
Return Annualized
Return
+ JOBS 6/21/21 Garnet Faith Limited (N/A) All Cash $3.63 B $79.05 $48.18 158,366 3/31/22 64.07% 449.74%
+ AJRD 12/20/20 Lockheed Martin Corporation (LMT) All Cash $3.79 B $51.00 $37.05 1,588,866 3/31/22 37.65% 264.29%
+ CHNG 1/06/21 UnitedHealth Group Incorporated (UNH) All Cash $13.28 B $25.75 $19.76 3,445,592 6/30/22 30.31% 77.37%
+ MNTV 10/28/21 Zendesk (ZEN) All Stock $4.21 B $21.98 $17.05 654,552 6/30/22 28.90% 73.77%
+ TMX 12/14/21 Rentokil Initial plc (RTOKY) Special Conditions $6.7 B $55.00 $42.99 565,334 12/31/22 27.94% 31.18%
+ ATVI 1/18/22 Microsoft Corporation (MSFT) All Cash $68.7 B $95.00 $79.25 12,841,636 3/31/23 19.87% 17.40%
+ BRG 12/20/21 Blackstone Real Estate (N/A) Special Conditions $3.6 B $29.85 $26.52 398,122 6/30/22 12.56% 32.05%
+ SAFM 8/09/21 Cargill and Continental Grain Company (N/A) All Cash $4.49 B $203.00 $181.67 100,993 1/31/22 11.74% 0.00%
+ PNM 10/21/20 Avangrid, Inc. (AGR) All Cash $8.05 B $50.30 $45.45 669,084 6/30/22 10.67% 27.24%
+ AZPN 10/11/21 Emerson Electric Co. (EMR) Special Conditions $12.34 B $160.00 $144.83 277,461 6/30/22 10.47% 26.74%
+ SJR 3/15/21 Rogers Communications Inc. (RCI) Special Conditions $26 B $32.40 $29.49 362,395 6/30/22 9.87% 25.19%
+ ARNA 12/13/21 Pfizer Inc. (PFE) All Cash $4.69 B $100.00 $91.54 1,299,408 6/30/22 9.24% 23.59%
+ COHR 3/25/21 II-VI Incorporated (IIVI) Cash Plus Stock $6.84 B $276.49 $254.98 198,353 1/31/22 8.44% 0.00%
+ ZNGA 1/10/22 Take-Two Interactive Software, Inc. (TTWO) Special Conditions $12.7 B $9.86 $9.11 41,458,642 6/30/22 8.23% 21.01%
+ EXTN 1/24/22 Enerflex Ltd. (EFX.TO) All Stock $735 M $6.10 $5.64 438,421 9/30/22 8.23% 12.78%
+ ZGNX 1/19/22 UCB (N/A) Special Conditions $1.28 B $28.00 $26.09 2,257,425 6/30/22 7.32% 18.69%
+ TLMD 2/03/22 Patient Square Capital (N/A) All Cash $106.42 M $3.00 $2.83 3,793,175 6/30/22 6.01% 15.33%
+ STXB 11/19/21 Simmons First National Corporation (SFNC) All Stock $581 M $29.34 $27.89 97,196 6/30/22 5.18% 13.23%
+ VNE 10/04/21 Qualcomm Incorporated (QCOM) All Cash $3.87 B $37.00 $35.3 1,875,521 6/30/22 4.82% 12.29%
+ CCMP 12/15/21 Entegris, Inc. (ENTG) Cash Plus Stock $6.5 B $190.93 $183.36 395,620 12/31/22 4.13% 4.61%
+ NPTN 11/04/21 Lumentum Holdings Inc. (LITE) All Cash $745.24 M $16.00 $15.4 697,057 12/31/22 3.90% 4.35%
+ CERN 12/20/21 Oracle Corporation (ORCL) All Cash $28.4 B $95.00 $91.46 3,063,701 12/31/22 3.87% 4.32%
+ XENT 8/06/21 Medtronic plc (MDT) All Cash $1.1 billion $28.25 $27.2 305,395 3/31/22 3.86% 27.10%
+ PTRS 11/04/21 OceanFirst Financial Corp. (OCFC) Special Conditions $186 M $10.38 $10.045 67,925 6/30/22 3.33% 8.51%
+ PBCT 2/22/21 M&T Bank Corporation (MTB) All Stock $7.6 B $21.19 $20.59 4,018,019 3/31/22 2.90% 20.39%
+ NSEC 1/26/22 VR Insurance Holdings, Inc. (N/A) All Cash $41.4 M $16.35 $15.892 4,336 6/30/22 2.88% 7.36%
+ OCDX 12/23/21 Quidel Corporation (QDEL) Cash Plus Stock $8.33 B $17.57 $17.15 1,619,007 6/30/22 2.45% 6.26%
+ TSC 10/20/21 Raymond James Financial, Inc. (RJF) Cash Plus Stock $1.1 B $33.74 $32.98 139,452 6/30/22 2.30% 5.88%
+ MILE 11/08/21 Lemonade (LMND) All Stock $201.47 M $1.51 $1.48 3,509,710 6/30/22 2.25% 5.74%
+ ISBC 7/28/21 Citizens Financial Group, Inc. (CFG) Cash Plus Stock $3.5 B $17.51 $17.13 1,189,497 6/30/22 2.23% 5.70%
+ FBC 4/26/21 New York Community Bancorp, Inc. (NYCB) All Stock $2.6 B $45.89 $44.93 259,325 3/31/22 2.14% 15.04%
+ FRTA 2/22/21 Quikrete Holdings, Inc. (N/A) All Cash $2.74 B $24.00 $23.52 247,275 3/31/22 2.04% 14.32%
+ XLNX 10/27/20 Advanced Micro Devices, Inc. (AMD) All Stock $33.43 B $213.01 $209.02 3,061,885 3/31/22 1.91% 13.41%
+ LEVL 11/04/21 First Merchants Corporation (FRME) Cash Plus Stock $323.5 M $41.17 $40.47 24,406 6/30/22 1.74% 4.44%
+ BPMP 12/20/21 BP p.l.c. (BP) All Stock $2.45 B $18.91 $18.59 469,657 3/31/22 1.70% 11.93%
+ ROG 11/02/21 DuPont de Nemours, Inc. (DD) All Cash $5.2 B $277.00 $272.5 226,488 6/30/22 1.65% 4.22%
+ CTXS 1/31/22 Vista Equity Partners and Elliott Investment Management LP (N/A) All Cash $16.5 B $104.00 $102.36 2,342,937 6/30/22 1.60% 4.09%
+ RRD 12/14/21 Chatham Asset Management, LLC (N/A) All Cash $2.3 B $10.85 $10.7 2,250,611 6/30/22 1.40% 3.58%
+ VRS 12/19/21 BillerudKorsnäs AB (N/A) All Cash $825 M $27.00 $26.65 243,248 6/30/22 1.31% 3.35%
+ NUAN 4/12/21 Microsoft Corp (MSFT) All Cash $19.7 B $56.00 $55.37 3,168,040 3/31/22 1.14% 7.99%
+ FLOW 12/13/21 Lone Star Funds (N/A) All Cash $3.8 B $86.50 $85.58 426,759 6/30/22 1.08% 2.74%
+ WBT 7/14/21 Ali Holding S.r.l. (N/A) All Cash $4.8 B $24.00 $23.76 652,798 1/31/22 1.01% 0.00%
+ PSXP 10/27/21 Phillips 66 (PSX) All Stock $14.5 B $44.42 $43.98 527,126 3/31/22 1.00% 7.02%
+ ATC 7/01/21 MKS Instruments, Inc. (MKSI) Cash Plus Stock $6.5 B $24.36 $24.13 390,138 3/31/22 0.96% 6.73%
+ UMPQ 10/12/21 Columbia Banking System, Inc. (COLB) All Stock $4.5 B $21.03 $20.83 841,550 6/30/22 0.94% 2.40%
+ ACBI 7/23/21 SouthState Corporation (SSB) All Stock $542 M $31.20 $30.91 134,815 3/31/22 0.93% 6.53%
+ CONE 11/15/21 KKR and Global Infrastructure Partners (N/A) All Cash $15 B $90.50 $89.7 1,888,460 6/30/22 0.89% 2.28%
+ FOE 5/11/21 Prince International Corporation (N/A) All Cash $2.1 B $22.00 $21.82 378,470 3/31/22 0.82% 5.79%
+ STFC 7/12/21 Liberty Mutual Holding Company Inc. (N/A) All Cash $2.48 B $52.00 $51.58 34,139 3/31/22 0.81% 5.72%
+ GSKY 9/15/21 The Goldman Sachs Group (GS) All Stock $2.24 B $11.03 $10.94 1,438,297 3/31/22 0.80% 5.65%
+ EPAY 12/17/21 Thoma Bravo (N/A) All Cash $2.6 B $57.00 $56.56 1,144,937 6/30/22 0.78% 1.99%
+ INFO 11/30/20 S&P Global (SPGI) All Stock $44 B $117.60 $116.76 1,569,965 6/30/22 0.72% 1.84%
+ VG 11/22/21 Ericsson (ERIC) All Cash $6.2 B $21.00 $20.85 1,350,267 6/30/22 0.72% 1.84%
+ MCFE 11/08/21 Investor Group comprised of Advent, Permira, Crosspoint Capital, CPP Investments, GIC and ADIA (N/A) All Cash $14 B $26.00 $25.84 866,731 6/30/22 0.62% 1.58%
+ MIME 12/07/21 Permira (N/A) All Cash $5.8 B $80.00 $79.51 589,840 6/30/22 0.62% 1.57%
+ APR 1/10/22 Owens & Minor, Inc. (OMI) All Cash $1.62 B $37.50 $37.28 157,080 6/30/22 0.59% 1.51%
+ FTSI 10/22/21 ProFrac Holdings (N/A) All Cash $407.5 M $26.52 $26.38 32,324 3/31/22 0.53% 3.73%
+ VCRA 1/06/22 Stryker (SYK) All Cash $3.09 B $79.25 $78.84 1,978,599 3/31/22 0.52% 3.65%
+ CSLT 1/05/22 Vera Whole Health (N/A) All Cash $261.35 M $2.05 $2.04 373,404 3/31/22 0.49% 3.44%
+ ESBK 10/04/21 Community Bank System, Inc. (CBU) All Cash $82.8 M $23.10 $22.99 5,326 3/31/22 0.48% 3.36%
+ KRA 9/27/21 DL Chemical Co., Ltd. (N/A) All Cash $2.5 B $46.50 $46.35 188,755 6/30/22 0.32% 0.83%
+ MGP 8/04/21 VICI Properties Inc. (VICI) All Stock $17.2 billion $38.44 $38.32 460,249 6/30/22 0.31% 0.79%
+ PAE 10/25/21 Amentum Government Services Holdings LLC (N/A) All Cash $1.9 B $10.05 $10.02 414,195 3/31/22 0.30% 2.10%
+ GCP 12/06/21 Saint-Gobain (N/A) All Cash $2.3 B $32.00 $31.91 263,781 12/31/22 0.28% 0.31%
+ ANAT 8/09/21 Brookfield Asset Management Reinsurance Partners Ltd. (BAMR) All Cash $5.1 B $190.00 $189.5 64,086 6/30/22 0.26% 0.67%
+ GNOG 8/09/21 DraftKings Inc. (DKNG) All Stock $1.52 B $7.99 $7.97 522,096 3/31/22 0.25% 1.75%
+ MNR 11/05/21 Industrial Logistics Properties Trust (ILPT) All Cash $3.72 B $21.00 $20.95 465,738 6/30/22 0.24% 0.61%
+ TACO 12/06/21 Jack in the Box Inc. (JACK) All Cash $575 M $12.51 $12.49 339,036 3/31/22 0.16% 1.12%
+ KL 9/28/21 Agnico Eagle Mines Limited (AEM) All Stock $9.53 B $38.25 $38.21 1,069,047 3/31/22 0.10% 0.67%
+ FMBI 6/01/21 Old National Bancorp (ONB) All Stock $2.86 B $20.98 $20.99 611,855 3/01/22 -0.03% -0.56%
+ IHC 11/09/21 Geneve Holdings, Inc. (N/A) All Cash $813.9 M $57.00 $57.03 12,880 3/31/22 -0.05% -0.37%
+ CPLG 11/08/21 Highgate and Cerberus Capital Management, L.P. (N/A) Special Conditions $1.5 B $15.65 $15.71 1,240,804 3/31/22 -0.38% -2.68%
+ ABTX 11/10/21 CBTX, Inc. (CBTX) All Stock $1.5 B $40.79 $42.53 37,558 6/30/22 -4.08% -10.42%
+ PVG 11/09/21 Newcrest Mining Limited (NCMGY) All Stock $2.8 B $12.98 $13.7 432,835 3/31/22 -5.23% -36.74%
+ NES 12/13/21 Select Energy Services, Inc. (WTTR) All Stock $45 M $1.89 $2.32 45,688 3/31/22 -18.74% -131.55%

Conclusion:

Six active deals received shareholder approvals last week and the bidding war for R. R. Donnelley & Sons Company (RRD) has come to a rest for now after the company announced that the “Alternative Acquisition Proposal” from a strategic party has been withdrawn. On the regulatory front, Bloomberg reported that the FTC will be handling the antitrust review of Microsoft’s acquisition of Activision Blizzard. The spread on the deal is almost 20%, reflecting market sentiment that the deal is likely to face significant regulatory challenges.

SPAC activity has not picked up much with only four new SPAC IPOs filed last week. SPAC business combinations continue to grow on the other hand. We have introduced a new feature in our monthly Special Situations newsletter, where we will be looking at SPAC Business Combinations for potential short ideas. 

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Disclaimer: I have long positions in Arena Pharmaceuticals (ARNA) and Bluerock Residential Growth REIT (BRG). 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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