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Merger Arbitrage Mondays – Evoqua Water Technologies To Be Acquired by Xylem

  • January 30, 2023

Merger Arbitrage activity declined last week with one new deal announced and one deal closing.

Evoqua Water Technologies (AQUA)

Xylem (XYL), a global water technology company entered into an agreement last week to acquire Evoqua Water Technologies (AQUA), a mission critical water and wastewater treatment solutions for $7.5 billion in an all stock deal.

Headquartered in Pittsburgh, Pennsylvania, Evoqua operates through two segments, Integrated Solutions and Services, and Applied Product Technologies. The Integrated Solutions and Services segment provides outsourced water service contracts, capital systems and related recurring aftermarket services, and the Applied Product Technologies segment provides advanced filtration and separation products.

Evoqua Products and Services

Evoqua Products and Services

Evoqua started trading as a public company in 2017 and Xylem had approached the company for a potential acquisition before its IPO. According to Reuters, Evoqua also received acquisition interest from other potential buyers before agreeing to a deal with Xylem.

Solving the world’s water challenges has never been more urgent. Our acquisition of Evoqua creates a transformative global platform to address water scarcity, affordability and resilience at even greater scale,” said Patrick Decker, President and CEO of Xylem. “The combined company delivers an unparalleled portfolio of advanced technologies, integrated services and application expertise across the water cycle.

Xylem acquires Evoqua

Under the terms of the agreement, Xylem will acquire Evoqua in an all-stock transaction at a 0.480 exchange ratio, representing a value of $52.89 per share or a 29% premium based on Xylem and Evoqua closing prices as of January 20, 2023. Upon closing, Xylem shareholders will own approximately 75% and Evoqua shareholders will own approximately 25% of the combined company.

Xylem’s shares dropped after the deal was announced. With Xylem currently at $102.42, the deal values Evoqua at $49.16 per share. With Evoqua currently trading at $47.78, the spread is 2.89% or 6.94% annualized if the deal closes by mid-2023.

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

Merger Arbitrage

Deal Statistics:

Total Number of Deals Closed in 202311
Total Number of Deals Not Completed in 20231
Total Number of Pending Deals
Cash Deals42
Stock Deals11
Stock & Cash Deals3
Special Conditions16
Total Number of Pending Deals72
Aggregate Deal Consideration$464.55 billion

New Merger Arbitrage Deals:

  1. The acquisition of Evoqua Water Technologies (AQUA) by Xylem (XYL) for $7.52 billion in an all stock deal. Under the terms of the agreement, Evoqua shareholders will receive 0.480 shares of Xylem for each Evoqua share.

Deal Updates:

  1. On January 23, 2023, Ritchie Bros. Auctioneers Incorporated (RBA) and IAA, Inc. (IAAamended the terms of their previously announced merger agreement. Under the terms of the amended agreement, IAA shareholders will receive $12.801 per share in cash and 0.5252 common shares of Ritchie Bros. for each share of IAA common stock they own. Additionally, the Ritchie Bros. Board of Directors announced that it expects to approve the issuance of a one-time special dividend to Ritchie Bros. shareholders in the amount of $1.08 per common share, which will be payable to holders of record as of a pre-closing record date to be determined with the consent of the Toronto Stock Exchange (“TSX”) and contingent on the closing of the IAA transaction.
  2. On January 23, 2023, AstraZeneca (AZNlaunched its tender offer for CinCor Pharma (CINC), which is expected to expire on February 23, 2023.
  3. On January 23, 2023, Ipsen launched its tender offer for Albireo Pharma (ALBO), which is expected to expire on February 21, 2023.
  4. On January 24, 2023, Nuvei Corporation (NVEIlaunched its tender offer for Paya Holdings (PAYA) which is expected to expire on February 21, 2023.
  5. January 26, 2023: According to a New York Post report, the DOJ is said to be “within days” of possibly clearing Standard General’s planned purchase of Tegna (TGNA).


  1. Coupa Software Incorporated (COUP) obtained clearance for the consummation of the merger with Thoma Bravo in Germany on January 10, 2023.
  2. On January 23, 2023, Trean Insurance Group (TIG) announced the expiration of the waiting period under the HSR Act with respect to it’s pending transaction with Altaris Capital Partners.
  3. On January 24, 2023, a Canadian court dismissed the appeal by the Commissioner of Competition in an effort to overturn an approval of Rogers Communications Inc’s (RCI) bid to buy Shaw Communications (SJR).
  4. On January 25, 2023, South Jersey Industries (SJI) and the Infrastructure Investments Fund announced that the New Jersey Board of Public Utilities has unanimously approved IIF’s proposed acquisition of SJI. The NJ BPU’s approval marks the final regulatory approval needed to complete the transaction, which we expect to occur on February 1, 2023.


  1. January 25, 2023: According to Reuters, Britain’s competition regulator said that it has started the first phase of an investigation into Broadcom’s (AVGO) acquisition of VMware (VMW).
  2. On January 26, 2023, invoX Pharma and F-star Therapeutics (FSTX) issued a statement, stating that they are actively negotiating with CFIUS regarding the definitive terms of a mitigation agreement in order to permit the removal of CFIUS’s Interim Order and the completion of the transaction by January 31, 2023.
  3. January 26, 2023: According to Reuters, Sen. Elizabeth Warren wrote to the U.S. Federal Trade Commission to express concern about Amgen’s (AMGN) plan to buy Horizon Therapeutics (HZNP), and Indivior’s (LON: INDV) plan to buy Opiant (OPNT).
  4. January 26, 2023: According to Reuters, Sony’s (SONY) gaming chief Jim Ryan met EU antitrust chief Margrethe Vestager on Wednesday to discuss Microsoft’s (MSFT) bid for Activision Blizzard (ATVI).

Shareholders Meeting Schedule:

  1. Coupa Software Incorporated (COUP) – February 23, 2023
  2. Horizon Therapeutics Public Limited Company (HZNP) – February 24, 2023
  3. Myovant Sciences (MYOV) – March 1, 2023
  4. Neovasc (NVCN) – March 6, 2023
  5. Velodyne Lidar (VLDR) announced that the Special Meeting of Stockholders to approve the proposed merger with Ouster (OUSTwas convened and adjourned without conducting any business. The Special Meeting will reconvene on February 3, 2023.

Closed Deals:

  1. The acquisition of Benefitfocus (BNFT) by Voya Financial (VOYA) on January 24, 2023. It took 84 days for this deal to be completed.

Weekly Spread Changes:

The table below shows weekly spread changes between January 20, 2023, and January 27, 2023.

Company Quote
Last Week
Spread Change
FSTX4.21invoX Pharma (N/A)69.12%17.49%51.63%All Cash
GSMG1.19Cheers Inc (N/A)30.25%22.05%8.20%All Cash
LHCG156.74Optum (N/A)8.46%3.28%5.18%All Cash
IAA41.22Ritchie Bros. Auctioneers Incorporated (RBA)58.913.99%10.51%3.48%Cash Plus Stock
VLTA0.855Shell plc (SHEL)58.510.58%-2.21%2.79%All Cash
OIIM4.635FNOF Precious Honour Limited and Rim Peak Technology Limited (N/A)7.87%11.11%-3.24%All Cash
SJR29.78Rogers Communications Inc. (RCI)48.562.15%5.40%-3.25%Special Conditions
FCRD4.65Crescent Capital BDC, Inc. (CCAP)153.01%6.92%-3.91%Special Conditions
ATVI76.61Microsoft Corporation (MSFT)248.1624.00%28.66%-4.66%All Cash
ELSE4.869Mobile X Global, Inc. (N/A)-0.80%6.15%-6.95%All Cash

Top 10 Merger Arbitrage deals with the 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.

FSTX06/23/2022invoX Pharma (N/A)$7.12$4.2101/31/202369.12%12614.61%
SIMO05/05/2022MaxLinear, Inc. (MXL)$109.56$67.0106/30/202363.50%152.49%
SAVE07/28/2022JetBlue Airways Corporation (JBLU)$31.00$19.7606/30/202456.88%40.08%
GRIN10/12/2022Taylor Maritime Investments Limited and Good Falkirk Limited (N/A)$21.00$14.2603/31/202347.27%282.82%
BKI05/04/2022Intercontinental Exchange, Inc. (ICE)$85.00$60.8905/04/202339.60%152.13%
IRBT08/05/2022Amazon (AMZN)$61.00$45.3608/05/202334.48%66.94%
GSMG07/11/2022Cheers Inc (N/A)$1.55$1.1904/11/202330.25%153.36%
ACI10/14/2022The Kroger Co. (KR)$27.25$21.1903/31/202428.60%24.45%
ATVI01/18/2022Microsoft Corporation (MSFT)$95.00$76.6106/30/202324.00%57.64%
TSEM02/15/2022Intel Corporation (INTC)$53.00$42.7802/15/202323.89%512.93%

Deals In The Works

Two new potential Merger Arbitrage deals was added to the ‘Deals In The Works‘ section last week.

  1. On January 25, 2023, GasLog made an unsolicited non-binding proposal to acquire GasLog Partners (GLOP) for $7.70 per unit in cash.
  2. On January 25, 2023, Apollo Global Management (APO) teamed up with former SoftBank executive Marcelo Claure to explore a takeover of Millicom International Cellular (TIGO) that could value the Latin American telecoms operator at almost $10 billion, including debt.


  1. Emerson Electric (EMR) said it would not nominate candidates for election to the board of NI Corp (NATI) and kept its buyout offer price unchanged.
  2. Rupert Murdoch withdrew a proposal to reunite News Corp (NWSA) and Fox Corp as the company is also exploring a sale of Move Inc.
  3. Idaho Strategic Resources (IDR) reiterated its $1.36 a share proposal to buy Westwater Resources (WWR).
  4. Arco Platform Limited (ARCE) announced that proposal from from General Atlantic and Dragoneer Investment Group is under evaluation by the Special Committee, no decisions have been made with respect to the response to the proposal.

SPAC Arbitrage

SPAC Business Combination

  1. On January 26, 2023, Longevity Biomedical and Denali Capital Acquisition Corp. (DECA) announced that they have entered into a definitive business combination agreement.


  1. On January 25, 2023, Bridger Aerospace Group Holdings (BAER) and Jack Creek Investment (JCIC) announced the completion of their previously announced business combination.
  2. On January 25, 2023, Freightos Limited (CRGO) announced the closing of its business combination with Gesher I Acquisition Corp.
  3. On January 27, 2023, Orchestra BioMed (OBIO) announced the closing of its previously announced business combination with Health Sciences Acquisitions Corporation 2 (HSAQ).

List of all pending Merger Arbitrage deals:

Disclaimer: I have long positions in Activision Blizzard (ATVI), Spirit Airlines (SAVE), Atlas Air Worldwide (AAWW), First Horizon (FHN), Tower Semiconductor (TSEM) and TEGNA (TGNA). 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.