Friday, 28 October 2011

Mergers & Acquisitions - Week Ending 28/10/11

On Monday, it was announced that toy titan Mattel would purchase preschool game manufacturer HIT Entertainment for $680 million. This move will add names such as ‘Thomas the Tank Engine’ and ‘Bob the Builder’ to Mattel’s large portfolio of children’s brands. The buyer was up 2.1%. Sara Lee Corporation sold the majority of its North American foodservice and beverage units to The J.M. Smucker Company for $350 million. The two firms are expected to establish a working relationship based upon liquid coffee innovation. The consumer giants company was down 0.7%. In healthcare, Cigna bought HealthSpring for $3.8 billion in cash. This deal looks to capitalise on an ever-aging US demographic; adding 340,000 Medicare Advantage customers to Cigna. The target was boosted 33.7%, reflecting the large premium being paid, as Cigna gained 1.4%. Oracle said that they would buy RightNow Technologies, which provides customer service software, for $1.43 billion. This is part of the company’s strategy to expand its cloud-computing services. The tech powerhouse increased by 2.3%, while RightNow grew by 19.4% due to the premium offered. It was revealed in after hours trading that Morgan Stanley would become the latest Wall Street firm to divest its mortgage servicing company; selling ‘Saxon Mortgage Services’ to Ocwen Financial for $59 million. The following day, the vendor dropped 3.7% as the bidder hit a 4.2% rally. 

On Thursday, Ericsson brought its two decades in the cellphone market to an end when their stake in Sony Ericsson was acquired by their partner Sony for $1.5 billion. The joint venture had been struggling for most of its existence, facing stiff competition from the likes of Nokia and Apple, eventually only managing to break even. The markets reacted with positive sentiment to the split; the seller was up 9.2%, while the Japanese electronics firm gained 6.5%. Coca Cola purchased Great Plains Coca Cola Bottling for $380 million; the latest in a string of independent bottler acquisitions that they hope will cut production costs. The beverage giant closed 1.6% higher. Later that day, The Walt Disney Company took hold of a 49 percent stake in ‘Seven TV’, a Russian broadcaster, for around $300 million. This move will allow them to circulate a Russian equivalent of the ‘The Disney Channel’ in one of the world’s fastest growing economies. The worldwide entertainment company grew 3.1%. The following day, two Chinese automakers agreed to take over troubled car manufacturer Saab for a total of $240 million. Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade are hopeful that their funding will help the Scandinavian company become competitive once again, should the Chinese regulators allow the deal. Swedish Automobile, Saab’s parent company, was 20.5% lower by the bell.

Friday, 21 October 2011

Mergers & Acquisitions - Week Ending 21/10/11

On Sunday, it was announced that energy firm Kinder Morgan would buy rival El Paso Corporation for $21.1 billion. The recent surge in natural gas production is said to be behind the deal; one of the largest ever in the sector. The following day saw the target up 24.8%, reflecting the large premium being paid, while the buyers were also up 4.8%. Also that day, technology and imaging firm Eastman Kodak agreed to licence many of its patents to IMAX in a bid to raise money to turn itself around; having posted only one annual profit since 2004. The price tag was said to be just below $50 million. The sellers rose 4.8% as the motion picture group fell 4.6%. On Monday, G4S acquired its competitor ISS for $8.2 billion. Despite this move giving them a presence in the catering and cleaning markets as well as helping their reach into emerging markets, the world’s largest security business closed down 21.3%. Statoil purchased Brigham Exploration Company for $4.4 billion, expanding its presence in North American oil. The Norwegian integrated energy company lost 2.66% on the news. Also that day in energy, the US’ largest propane provider AmeriGas took over Energy Transfer Partners’ propane gas unit in a deal worth $2.9 billion. The vendor gained 5.4% while AmeriGas dropped 4.2%.

The midweek saw Alcatel-Lucent sell call center provider Genesys to Permira, a private equity firm, for $1.5 billion in an all-cash deal. The telecommunications giant fell 12.2%. Also that day, Abbott Laboratories said that it planned to split into two public companies, one medical device and diagnostics unit and one focused on pharmaceutical innovation. They were boosted 1.5%. On Thursday, Cisco Systems bought BNI Video, a provider of video delivery software, for $99 million. The buyer is looking to integrate BNI’s technology into its Videoscape project. This move had virtually no effect on the IT business’ share price. The following day, Banco Santander sold a 35% stake in its automotive financing unit ‘Santander Consumer USA’ to a group of private equity firms in a $1.15 billion deal. This comes as the Eurozone’s largest bank looks to improve its balance sheet. The seller’s price was lifted 2.6%. Also that day, Bain Capital acquired Japanese restaurant chain Skylark from a group of investors including Nomura for $2.1 billion. The financial services company finished the week up 2.2%.

Friday, 14 October 2011

Mergers & Acquisitions - Week Ending 14/10/11

On Sunday, Sinopec announced that they would buy Daylight Energy for $2.1 billion in an all-cash deal. This deal reflects the high demand for energy by the Chinese as they continue to expand quickly. The buyers were up 3.4% the following day, while the target was up a massive 110% on Tuesday, reflecting the large premium being paid. Monday also saw action in the energy sector as Superior Energy purchased Complete Production Services for $2.7 billion. Despite this move creating a top-tier diversified oil services company, Superior fell 13.8%, while Complete was boosted 39.5%. The following day, 99 Cents Only was acquired by Ares Management and the Canadian Pension Plan Investment Board for $1.6 billion. This is the latest in a string of private equity purchases of discount stores, which look to be somewhat immune to the credit crunch. The retailer finished the day 4.4% higher. Also that day, NeuStar absorbed Targus Information, a provider of caller ID services, in a $650 million deal. The telecommunications company 7.4%.

Wednesday saw Liz Claiborne sell its namesake brand as well as Monet to fellow retailer JC Penney and its Kensie brand to Bluestar Alliance. This is part of a series of brand sales which are expected to generate $328 million for the debt-laden firm. It was up 34%, while JC Penney was up 0.9%. The following day, aerospace firm Pratt & Whitney took over Rolls Royce’s share of International Aero Engines for $1.5 billion. The British power systems provider gained 8.7% on the news, as United Technologies, parent company of the buyer, lost almost 1% by the bell. On Friday, consumer goods giant Unilever bought an eighty two percent stake in Concern Kalina, a Russian cosmetics brand, for $537 million. This move reflects large American consumer firms’ reliance on emerging markets for growth as domestic demand wanes. They were up 2.5% at week’s end.

Friday, 7 October 2011

Mergers & Acquisitions - Week Ending 07/10/11

On Sunday, it was announced that Intel would buy Telemap, a developer of map software for an undisclosed fee, estimated to be in the region of $300 million. Despite this move creating an alternative to the services of firms such as Nokia and Google, the tech giants closed down 3.4% the following day. On Monday, Pharmaceutical Product Development was purchased by the Carlyle Group and Hellman & Friedman for $3.9 billion. This is the latest in a string of large private equity buyouts in the healthcare industry since the credit crunch. The pharmaceutical research company was boosted by 25.8%, reflecting the large premium being paid. Best Buy sold music sharing service Napster to its competitor Rhapsody. At one time Napster dominated the p2p market, but subsequently ran into difficulty over copyright infringement. The terms were not disclosed. The electronics retailer fell 5% on the news. Agco bought GSI Holdings for $940 million. Despite this decision expanding their business into the grain storage and protein production market, the agricultural giant dropped 6.3%.

It was announced that ACI Worldwide would takeover S1 Corporation, a provider of financial software solutions, in a deal valued at $516 million. The buyer hopes to create a global leader in payments solutions. The markets reacted negatively to the news; the target shrunk by 1.2% as ACI lost 8.3%. Also that day, McGraw-Hill Companies said in after hours announcement that they would sell their broadcasting unit to media firm E.W. Scripps to $212 million in an all-cash deal. The latest in a series of spin-offs designed to improve its share price and refocus attention on its business information unit. The buyer closed 1.5% lower on Tuesday, while the information services giant grew 2.9%. The next major deal came on Thursday, when Blackstone’s GSO Capital Partners acquired Harbourmaster Capital, a European leveraged loan manager, for an undisclosed price. The asset management company was up 7.2%. The following day, Nuance Communications purchased Swype, creators of touch screen text solutions, for $102.5 million. The bidder ended the day 1.4% lower.