Merger Arbitrage Mondays – Thoma Bravo Adds SailPoint Technologies To Its Portfolio And Approaches Twitter

Merger activity increased last week with five new deals announced and one of the five new deals announced was a potential deal in the works.

SailPoint Technologies (SAIL)

Thoma Bravo continued its binge of software acquisitions last week by entering into an agreement to acquire SailPoint Technologies. This is Thoma Bravo’s second acquisition this year. On March 30, 2022, Thoma Bravo announced the acquisition of Anaplan (PLAN) for $10.7 billion. We checked our database and Thoma Bravo acquired six public companies last year for a total of $32.3 billion. The private equity firm has also approached Twitter (TWTR) after Elon Musk sent his $54.20 per share non-binding proposal to acquire Twitter.

Founded in 2004 and headquartered in Austin, Texas, SailPoint Technologies provides identity security to modern enterprises by harnessing AI and machine learning. On April 11, 2022, the company entered into an agreement to be acquired by Thoma Bravo for $6.9 billion. Expected to close in the second half of the year, the agreement includes a “go-shop” period, that will expire on May 16, 2022.

Datto Holding (MSP)

Founded in 2007 and headquartered in Norwalk, Connecticut, Datto Holding provides security and cloud-based software solutions purpose-built for Managed Service Providers (MSPs). We added Datto Holdings as a potential deal in the works on March 16, 2022, when Bloomberg reported that the company was exploring strategic options including a potential sale after receiving takeover interest. MSP’s price after this announcement was $25.86. On April 11, 2022, Kaseya, a provider of unified IT management and security software , entered into a definitive agreement to acquire Datto for $6.2 billion or $35.50 per share in cash. The offer represents a 52% premium to Datto’s stock price of $23.37 as of March 16.

Nielsen Holdings (NLSN)

WindAcre Partners disclosed on April 14 that it has raised its stake in Nielsen Holdings to 25% as it continues to oppose the company’s agreement to be acquired by a private equity consortium.

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

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Deals In The Works

There were four new deals announced in the Deals in the Works section last week.

We added Twitter (TWTR) as a potential deal in the works on April 13, 2022, when Elon Musk offered to buy the company for $54.20 per share in cash, a 54% premium over the day before he began investing in Twitter and a 38% premium over the day before his investment was publicly announced.

In response to this offer, and in order to prevent a hostile bid from Musk, the Board of Directors of Twitter unanimously adopted a limited duration shareholder rights plan, a method also known as a “poison pill”. The poison pill, which is expected to expire on April 14, 2023, will go into effect if a shareholder acquires more than 15% of the company without prior approval by the board.

According to the press release, “In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (other than the person, entity or group triggering the Rights Plan, whose rights will become void and will not be exercisable) to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right.”

We could see a bidding war for Twitter in the coming days, with Thoma Bravo expressing interest in making a competing bid for Musk’s offer. Twitter is working with Goldman Sachs and JPMorgan Chase while Musk is working with Morgan Stanley.

SPAC Arbitrage

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

  1. EUDA Health Limited, a Singapore-based digital health platform and 8i Acquisition 2 Corp. (8i) (LAX)  entered into a definitive business combination agreement.

Weekly Spread Changes:

The table below shows weekly spread changes between April 8 and April 15, 2022.

Symbol Quote Acquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
SAVE 25.12 Frontier Group Holdings, Inc. (ULCC) 11.61 -3.12% -13.71% 10.59% Cash Plus Stock
EMCF 36.9 Farmers National Banc Corp. (FMNB) 16 -6.78% -9.19% 2.41% All Stock
AZPN 161.95 Emerson Electric Co. (EMR) 92.86 -1.20% -3.03% 1.83% Special Conditions
ATVI 78.93 Microsoft Corporation (MSFT) 279.83 20.36% 18.62% 1.74% All Cash
SJR 30.83 Rogers Communications Inc. (RCI) 59.23 5.09% 3.35% 1.74% Special Conditions
PBIP 16.02 Fulton Financial Corporation (FULT) 15.85 1.68% 2.86% -1.18% Cash Plus Stock
MILE 1.17 Lemonade (LMND) 23.77 6.86% 8.48% -1.62% All Stock
NP 39.44 Schweitzer-Mauduit International, Inc. (SWM) 26.17 -9.89% -7.94% -1.95% All Stock
TEN 18.05 Apollo Global Management, Inc. (APO) 57.49 10.80% 12.99% -2.19% All Cash
WLL 83.41 Oasis Petroleum Inc. (OAS) 151 12.02% 14.40% -2.38% Cash Plus Stock

Deal Statistics:

Total Number of Deals Closed in 2022 59
Total Number of Deals Not Completed in 2022 4
Total Number of Pending Deals
Cash Deals 49
Stock Deals 10
Stock & Cash Deals 9
Special Conditions 8
Total Number of Pending Deals 76
Total Deal Size $725.4715 billion

New Deals:

  1. The acquisition of SailPoint Technologies Holdings (SAIL) by Thoma Bravo for $6.9 billion or $65.25 per share in cash.
  2. The acquisition of Datto Holding (MSP) by Kaseya for $6.2 billion or $35.50 per share in cash. We added MSP as a potential deal to the Deals in the Works section on March 16, 2022,  and the price after the news of the potential deal came out was $25.86.
  3. The acquisition of Sierra Oncology (SRRA) by GlaxoSmithKline (GSK) for $1.1 billion or $55 per share in cash.
  4. The acquisition of Antares Pharma (ATRS) by Halozyme Therapeutics (HALO) for $960 million or $5.60 per share in cash.
  5. The acquisition of Vidler Water Resources (VWTR) by D.R. Horton (DHI) for $260 million or $15.75 per share in cash.

Deal Updates:

  1. On April 11, 2022, Oracle Corporation (ORCL) announced that it has extended its tender offer in connection with the acquisition of Cerner Corporation (CERN) until May 11, 2022.
  2. On April 11, 2022, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), expired in connection with the previously announced proposed merger between Renewable Energy Group (REGI) and Chevron Corporation (CVX).
  3. On April 12, 2022, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), expired in connection with the previously announced proposed merger between Huttig Building Products (HBP) and Woodgrain.
  4. On April 12, 2022, Bluerock Residential Growth REIT (BRG) its stockholders approved the proposed acquisition of the company by affiliates of Blackstone Real Estate. The Acquisition will occur following the spin-off of the Company’s single-family rental business through the taxable distribution to common stockholders of all of the outstanding shares of common stock of a newly formed real estate investment trust named Bluerock Homes Trust. Company common stockholders will receive $24.25 in cash per share of company common stock in the ccquisition in addition to the BHM common stock that they will receive in the Spin-Off.
  5. On April 13, 2022, TEGNA (TGNA) announced that the special meeting of stockholders will be on May 17, 2022.
  6. On April 13, 2022, Spirit (SAVEreceived a request for additional information from the U.S. Department of Justice (DOJ) with respect to its proposed merger with Frontier (ULCC). A second request from the DOJ was expected for a transaction of this nature. Spirit remains bound by the terms of the merger agreement with Frontier and will continue to voluntarily provide information to the DOJ in order to facilitate its review of the proposed transaction.
  7. April 13, 2022: According to Reuters, Alleghany (Y) shareholder, Shiva Stein has sued to block Berkshire’s (BRK.ABRK.B) buyout over lack of disclosures.
  8. On April 14, 2022, SOC Investment, an activist shareholder group urged investors to vote against the proposed Activision Blizzard (ATVI) and Microsoft (MSFT) merger during Activision’s upcoming meeting on April 28.
  9. On April 14, 2022, WindAcre Partners disclosed on April 14 that it has raised its stake in Nielsen Holdings (NLSN) to 25% as it continues to oppose the deal.

Top 10 deals with largest spreads:

Please do your own due diligence on deals with large spreads. Some of these large spreads might be related to regulatory issues or because of the way the deal is structured. We classify some of these deals as “special situation” deals in our merger arbitrage tool and provide additional details to help with the analysis. There may be unique situations related to special dividends, spinoffs, proration, etc. that need to be accounted for when looking at these spreads.

Symbol Announced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
Profit Annualized
Profit
ATVI 01/18/2022 Microsoft Corporation (MSFT) $95.00 $78.93 06/30/2023 20.36% 16.89%
CHNG 01/06/2021 UnitedHealth Group Incorporated (UNH) $27.75 $23.6 12/31/2022 17.58% 24.78%
PTRS 11/04/2021 OceanFirst Financial Corp. (OCFC) $10.38 $8.89 06/30/2022 16.76% 81.57%
MBII 03/16/2022 Bioceres Crop Solutions Corp. (BIOX) $1.11 $0.9802 09/30/2022 13.12% 28.67%
BRG 12/20/2021 Blackstone Real Estate (N/A) $29.85 $26.51 06/30/2022 12.60% 61.32%
WLL 03/07/2022 Oasis Petroleum Inc. (OAS) $93.44 $83.41 12/31/2022 12.02% 16.94%
TEN 02/23/2022 Apollo Global Management, Inc. (APO) $20.00 $18.05 12/31/2022 10.80% 15.22%
ZNGA 01/10/2022 Take-Two Interactive Software, Inc. (TTWO) $9.86 $8.94 06/30/2022 10.29% 50.08%
TSEM 02/15/2022 Intel Corporation (INTC) $53.00 $48.13 02/15/2023 10.12% 12.11%
FHN 02/28/2022 The Toronto-Dominion Bank (TD) $25.00 $23.04 11/27/2022 8.51% 13.80%

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
+ ATVI 1/18/22 Microsoft Corporation (MSFT) All Cash $68.7 B $95.00 $78.93 4,571,582 6/30/23 20.36% 16.97%
+ TMX 12/14/21 Rentokil Initial plc (RTOKY) Special Conditions $6.7 B $55.00 $45.96 272,746 12/31/22 19.67% 27.93%
+ CHNG 1/06/21 UnitedHealth Group Incorporated (UNH) All Cash $13.28 B $27.75 $23.6 2,611,016 12/31/22 17.58% 24.97%
+ PTRS 11/04/21 OceanFirst Financial Corp. (OCFC) Special Conditions $186 M $10.38 $8.89 9,154 6/30/22 16.76% 83.80%
+ MBII 3/16/22 Bioceres Crop Solutions Corp. (BIOX) All Stock $236 M $1.11 $0.9802 323,525 9/30/22 13.12% 29.02%
+ BRG 12/20/21 Blackstone Real Estate (N/A) Special Conditions $3.6 B $29.85 $26.51 241,043 6/30/22 12.60% 63.00%
+ WLL 3/07/22 Oasis Petroleum Inc. (OAS) Cash Plus Stock $2.82 B $93.44 $83.41 284,368 12/31/22 12.02% 17.07%
+ TEN 2/23/22 Apollo Global Management, Inc. (APO) All Cash $7.1 B $20.00 $18.05 693,903 12/31/22 10.80% 15.34%
+ ZNGA 1/10/22 Take-Two Interactive Software, Inc. (TTWO) Special Conditions $12.7 B $9.86 $8.94 14,248,146 6/30/22 10.29% 51.45%
+ TSEM 2/15/22 Intel Corporation (INTC) All Cash $5.4 B $53.00 $48.13 525,191 2/15/23 10.12% 12.19%
+ FHN 2/28/22 The Toronto-Dominion Bank (TD) Special Conditions $13.4 B $25.00 $23.04 4,165,186 11/27/22 8.51% 13.92%
+ SAFM 8/09/21 Cargill and Continental Grain Company (N/A) All Cash $4.49 B $203.00 $189.13 151,376 6/30/22 7.33% 36.67%
+ TGNA 2/22/22 Standard General L.P. (N/A) Special Conditions $8.6 B $24.00 $22.44 1,849,901 12/31/22 6.95% 9.87%
+ MILE 11/08/21 Lemonade (LMND) All Stock $201.47 M $1.25 $1.17 494,386 6/30/22 6.86% 34.32%
+ NPTN 11/04/21 Lumentum Holdings Inc. (LITE) All Cash $745.24 M $16.00 $15.21 402,786 12/31/22 5.19% 7.38%
+ SJR 3/15/21 Rogers Communications Inc. (RCI) Special Conditions $26 B $32.40 $30.83 221,662 6/30/22 5.09% 25.46%
+ ATC 7/01/21 MKS Instruments, Inc. (MKSI) Cash Plus Stock $6.5 B $22.52 $21.47 794,853 9/30/22 4.90% 10.83%
+ PNM 10/21/20 Avangrid, Inc. (AGR) All Cash $8.05 B $50.30 $48.04 662,967 6/30/22 4.70% 23.52%
+ VG 11/22/21 Ericsson (ERIC) All Cash $6.2 B $21.00 $20.16 1,762,198 6/30/22 4.17% 20.83%
+ SJI 2/24/22 Infrastructure Investments Fund (N/A) All Cash $8.1 B $36.00 $34.56 456,352 12/31/22 4.17% 5.92%
+ COHR 3/25/21 II-VI Incorporated (IIVI) Cash Plus Stock $6.84 B $276.40 $265.7 104,239 5/31/22 4.03% 34.19%
+ CCMP 12/15/21 Entegris, Inc. (ENTG) Cash Plus Stock $6.5 B $182.62 $176.2 226,190 12/31/22 3.64% 5.17%
+ MGI 2/15/22 Madison Dearborn Partners, LLC (N/A) All Cash $1.8 B $11.00 $10.62 1,046,617 12/31/22 3.58% 5.08%
+ HTA 2/28/22 Healthcare Realty Trust Incorporated (HR) Cash Plus Stock $10.74 B $32.34 $31.33 2,749,315 9/30/22 3.22% 7.13%
+ MNDT 3/08/22 Alphabet Inc. (GOOG) All Cash $5.4 B $23.00 $22.35 8,739,508 12/31/22 2.91% 4.13%
+ CDR 3/02/22 Wheeler Real Estate Investment Trust, Inc. (WHLR) All Cash $291.3 M $29.00 $28.3 133,767 6/30/22 2.47% 12.37%
+ GCP 12/06/21 Saint-Gobain (N/A) All Cash $2.3 B $32.00 $31.26 272,430 12/31/22 2.37% 3.36%
+ MSP 4/11/22 Kaseya (N/A) All Cash $6.2 B $35.50 $34.73 1,699,861 12/31/22 2.22% 3.15%
+ NLSN 3/29/22 Evergreen Coast Capital Corporation (N/A) All Cash $16 B $28.00 $27.4 22,772,895 12/31/22 2.19% 3.11%
+ RNDB 3/28/22 Hometown Financial Group, Inc. (N/A) All Cash $146.5 M $27.00 $26.43 10,849 12/31/22 2.16% 3.06%
+ EXTN 1/24/22 Enerflex Ltd. (EFX.TO) All Stock $735 M $7.64 $7.49 248,264 9/30/22 2.06% 4.56%
+ CERN 12/20/21 Oracle Corporation (ORCL) All Cash $28.4 B $95.00 $93.3 1,257,324 12/31/22 1.82% 2.59%
+ MTOR 2/22/22 Cummins Inc. (CMI) All Cash $3.7 B $36.50 $35.85 4,344,805 12/31/22 1.81% 2.58%
+ CTXS 1/31/22 Vista Equity Partners and Elliott Investment Management LP (N/A) All Cash $16.5 B $104.00 $102.24 926,135 6/30/22 1.72% 8.61%
+ LHCG 3/28/22 Optum (N/A) All Cash $6.2 B $170.00 $167.14 958,390 12/31/22 1.71% 2.43%
+ SAIL 4/11/22 Thoma Bravo (N/A) All Cash $6.9 B $65.25 $64.16 10,663,414 12/31/22 1.70% 2.41%
+ SUMR 3/16/22 Kids2, Inc. (N/A) All Cash $97.44 M $12.00 $11.8 2,606 6/30/22 1.69% 8.47%
+ PBIP 3/02/22 Fulton Financial Corporation (FULT) Cash Plus Stock $142.1 M $16.29 $16.02 9,788 9/30/22 1.68% 3.71%
+ FBC 4/26/21 New York Community Bancorp, Inc. (NYCB) All Stock $2.6 B $40.31 $39.66 264,313 3/31/22 1.64% 0.00%
+ NSEC 1/26/22 VR Insurance Holdings, Inc. (N/A) All Cash $41.4 M $16.35 $16.09 808 6/30/22 1.62% 8.08%
+ ROG 11/02/21 DuPont de Nemours, Inc. (DD) All Cash $5.2 B $277.00 $272.67 145,855 6/30/22 1.59% 7.94%
+ CNR 3/07/22 Clayton, Dubilier & Rice (N/A) All Cash $5.8 B $24.65 $24.35 1,373,409 9/30/22 1.23% 2.73%
+ IIN 2/28/22 Altaris Capital Partners, LLC (N/A) All Cash $183.22 M $24.25 $23.96 67,760 6/30/22 1.21% 6.05%
+ FOE 5/11/21 Prince International Corporation (N/A) All Cash $2.1 B $22.00 $21.74 338,178 6/30/22 1.20% 5.98%
+ PLAN 3/20/22 Thoma Bravo (N/A) All Cash $10.7 B $66.00 $65.23 6,213,772 6/30/22 1.18% 5.90%
+ WBT 7/14/21 Ali Holding S.r.l. (N/A) All Cash $4.8 B $24.00 $23.75 1,014,881 6/30/22 1.05% 5.26%
+ OCDX 12/23/21 Quidel Corporation (QDEL) Cash Plus Stock $8.33 B $18.84 $18.65 437,370 6/30/22 1.04% 5.21%
+ XENT 8/06/21 Medtronic plc (MDT) All Cash $1.1 billion $28.25 $27.96 235,463 4/30/22 1.04% 31.55%
+ REGI 2/28/22 Chevron Corporation (CVX) All Cash $2.75 B $61.50 $60.88 1,319,658 12/31/22 1.02% 1.45%
+ CDK 4/07/22 Brookfield Business Partners (N/A) All Cash $8.3 B $54.87 $54.44 4,543,607 9/30/22 0.79% 1.75%
+ MN 4/01/22 Callodine (N/A) All Cash $137.1 M $12.85 $12.75 127,894 9/30/22 0.78% 1.73%
+ TUFN 4/06/22 Turn/River Capital (N/A) All Cash $570 M $13.00 $12.9 426,148 6/30/22 0.78% 3.88%
+ TVTY 4/05/22 Stone Point Capital (N/A) All Cash $2 B $32.50 $32.26 1,250,454 9/30/22 0.74% 1.65%
+ UMPQ 10/12/21 Columbia Banking System, Inc. (COLB) All Stock $4.5 B $17.98 $17.85 825,861 6/30/22 0.74% 3.68%
+ ATRS 4/13/22 Halozyme Therapeutics, Inc. (HALO) All Cash $960 M $5.60 $5.56 20,796,184 6/30/22 0.72% 3.60%
+ ESBK 10/04/21 Community Bank System, Inc. (CBU) All Cash $82.8 M $23.10 $22.96 2,000 3/31/22 0.61% 0.00%
+ MGP 8/04/21 VICI Properties Inc. (VICI) All Stock $17.2 billion $39.74 $39.54 1,009,017 6/30/22 0.50% 2.49%
+ SRRA 4/13/22 GlaxoSmithKline plc (GSK) All Cash $1.1 B $55.00 $54.75 2,882,916 9/30/22 0.46% 1.01%
+ APTS 2/16/22 Blackstone Real Estate Income Trust, Inc. (N/A) All Cash $5.8 B $25.00 $24.89 979,996 6/30/22 0.44% 2.21%
+ ANAT 8/09/21 Brookfield Asset Management Reinsurance Partners Ltd. (BAMR) All Cash $5.1 B $190.00 $189.17 58,181 6/30/22 0.44% 2.19%
+ MIME 12/07/21 Permira (N/A) All Cash $5.8 B $80.00 $79.67 656,556 6/30/22 0.41% 2.07%
+ JOBS 6/21/21 Garnet Faith Limited (N/A) All Cash $3.63 B $61.00 $60.77 384,839 6/30/22 0.38% 1.89%
+ EPAY 12/17/21 Thoma Bravo (N/A) All Cash $2.6 B $57.00 $56.81 357,523 6/30/22 0.33% 1.67%
+ GNOG 8/09/21 DraftKings Inc. (DKNG) All Stock $1.52 B $6.02 $6 420,246 5/31/22 0.31% 2.67%
+ Y 3/21/22 Berkshire Hathaway (BRK.A) All Cash $11.6 B $848.02 $845.49 101,730 12/31/22 0.30% 0.42%
+ VOLT 3/14/22 Vega Consulting, Inc. (N/A) All Cash $181.81 M $6.00 $5.99 166,959 6/30/22 0.17% 0.83%
+ ECOL 2/09/22 Republic Services, Inc. (RSG) All Cash $2.2 B $48.00 $47.94 1,139,368 6/30/22 0.13% 0.63%
+ TSC 10/20/21 Raymond James Financial, Inc. (RJF) Cash Plus Stock $1.1 B $33.95 $33.91 143,374 6/30/22 0.12% 0.59%
+ HBP 3/21/22 Woodgrain Inc. (N/A) All Cash $350 M $10.70 $10.69 227,184 6/30/22 0.09% 0.47%
+ POLY 3/28/22 HP Inc. (HPQ) All Cash $3.3 B $40.00 $40.05 675,747 12/31/22 -0.12% -0.18%
+ ABTX 11/10/21 CBTX, Inc. (CBTX) All Stock $1.5 B $40.82 $40.91 44,435 6/30/22 -0.22% -1.08%
+ AZPN 10/11/21 Emerson Electric Co. (EMR) Special Conditions $12.34 B $160.00 $161.95 223,184 6/30/22 -1.20% -6.02%
+ SAVE 2/07/22 Frontier Group Holdings, Inc. (ULCC) Cash Plus Stock $6.6 B $24.34 $25.12 1,869,453 12/31/22 -3.12% -4.44%
+ EMCF 3/24/22 Farmers National Banc Corp. (FMNB) All Stock $105 M $34.40 $36.9 7,280 12/31/22 -6.78% -9.62%
+ VWTR 4/14/22 D.R. Horton, Inc. (DHI) All Cash $260 M $15.75 $17.16 3,387,330 6/30/22 -8.22% -41.08%
+ NP 3/28/22 Schweitzer-Mauduit International, Inc. (SWM) All Stock $1.18 B $35.54 $39.44 61,087 12/31/22 -9.89% -14.05%

Conclusion:

Multiple active deals faced challenges last week. Alleghany (Y), Activision Blizzard (ATVI), and Nielsen Holdings (NLSN) have activist shareholders trying to block their respective transactions. Spirit Airlines (SAVE) received a request for additional information from the U.S. Department of Justice (DOJ). SPAC activity continues to dwindle with only one SPAC IPO filed and one SPAC business combination announced.

Disclaimer: I have long positions in First Horizon (FHN), Tower Semiconductor (TSEM), Healthcare Trust of America (HTA), TEGNA (TGNA) 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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