Friday, 23 March 2012

Mergers & Acquisitions - Week Ending 03/23/12


Over the weekend, it was announced that UPS would buy rival TNT Express for $6.8 billion. This is expected to increase the shipping giant’s exposure to the European and Chinese markets. The bidder and the target gained 3.44% and 1.05% respectively. On Monday, Vista Equity Partners purchased Misys for $2 billion. The private equity group plans to combine it with Turaz, another risk systems firm in their portfolio. The financial software company was up 9.8%. AboveNet was taken over by fellow fiber optics provider Zeyo Group in a $2.2 billion all-cash deal. As cloud computing grows rapidly, Zeyo may be looking to increase their higher bandwidth infrastructure. AboveNet was boosted 12.8%, reflecting the premium offered.  Later that day, it emerged that Williams Partners would absorb shale processing subsidiary Caiman Eastern Midstream for $2.5 billion. This is the latest in a string of deals by gas companies looking to cash in on fracking. The buyer was down 3.4%. Also that evening, Amazon acquired Kiva Systems, which makes its warehouse robots, for $775 million. Amazon’s move will improve not only its productivity, but also its margins as it strikes off another cost. The online marketplace increased by 3.7%.


The following day, Glencore bought Viterra for $6.2 billion. This will strengthen the diversified giant’s presence in agribusiness; Viterra is Canada’s largest grain handler. In an attempt to appease regulators, Glencore also divided some of the purchased assets among smaller firms in what was officially a consortium. The commodity trader dropped 1.1%. Also that day, On Assignment purchased rival staffing firm Apex Systems for $600 million. By supplementing its current offerings with Apex’s IT operations, On Assignment is creating one of the largest staffing businesses in the US. Its stock jumped over 26% on the news. The midweek saw Indian technology firms Tech Mahindra and Satyam merge in a $1 billion deal. The target had only recently recovered its reputation following allegations of accounting fraud three years ago. The bidder and Satyam grew 5.4% and 4.7% respectively. JPMorgan purchased a 20 percent stake in Bridge Trust Company for an undisclosed amount. Many see this as a safer bet on Chinese growth than that of its competitors; smaller investment trusts like these don’t take consumer deposits and bear much less of their client’s risk. The financial conglomerate finished 0.6% lower. Also that day, Zynga acquired OMGPOP for an unknown fee. In absorbing the mobile games company, the entertainment firm is looking to become less reliant on Facebook for earnings. They gained 2.5%. On Thursday, Lloyds sold $793 million worth of loans to Sankaty Capital, a subsidiary of Bain Capital. This comes as European banks look to divest non-core assets to strengthen their balance sheets. The British bank lost 2.7%.