Friday, 27 July 2012

Mergers & Acquisitions - Week Ending 07/27/12

Over the weekend, it was announced that NRG Energy would buy GenOn Energy for $1.7 billion. The move, which will create one of America’s largest power generation firms, is an attempt by the firms to survive in the face of falling electricity prices. NRG was up 8% while the target was boosted 26%, exceeding the premium offered. Monday saw action in transport, as Genessee & Wyoming purchased RailAmerica for $1.4 billion. The buyer is expecting this to increase their EPS by 10 percent. G&W and RailAmerica gained 0.6% and 9.8% respectively. United Technologies sold its Rocketdyne unit to GenCorp for $550 million. This comes as UTC looks to refocus on its core businesses. The seller dropped 1.3% while the defense and aerospace manufacturer jumped over 12%. Peet’s Coffee & Tea was acquired by Joh. A. Benckiser for $974 million. The conglomerate believes in Peet’s core values, as well as its long term growth prospects. The beverage company was elevated almost 28%, mirroring the premium offered. Dreamworks Animation absorbed Classic Media for $155 million. Through the deal, Dreamworks will add many popular family entertainment franchises to its portfolio. The entertainment company lost 0.4%. Later that day, VMware bought Nicira for $1.05 billion. With this deal, the software visualization firm steps into server visualization, a field with high growth forecasted. The buyer was down 0.4% on Tuesday.

The midweek saw MGN Gas Networks taken over by a consortium of Li Ka-shing’s companies for $1 billion. Mr Li believes that adding this to his complimentary businesses may help return the British gas firm to profitability. The markets didn’t agree as two of the bidders, Cheung Kong Holdings and Power Assets Holdings, fell 0.9% and 1.8% respectively. Shell announced oil and gas production sharing contracts with CNOOC and CNPC; two Chinese energy firms. The fields at the center of these deals are in West Africa and Changbei, China, respectively. The fight continues to meet China’s ever-increasing energy needs. The oil and gas firm closed 0.9% higher. Also that day, United Technologies divested its pumps and compressors unit Hamilton Sunstrand to BC Partners and the Carlyle Group for $3.46 billion. This is the latest in a string of non-core spin-offs to fund its takeover of Goodrich. Carlyle and the building systems and aerospace supplier gained 1.2% and 0.4% respectively. On Friday, Apple acquired AuthenTec, a mobile security group, for $356 million. An increase in software attacks on iOS has followed the recent surge in popularity, and Apple is now looking to bolster its security. The tech giant was up 1.8% while AuthenTec spiked over 66%, exceeding the premium offered.

Friday, 20 July 2012

Mergers & Acquisitions - Week Ending 07/20/12

Kicking off a busy day in health sciences, Monday morning saw GlaxoSmithKline buy biopharmaceutical company Human Genome Sciences for $3 billion. Through the deal, GSK will be looking to replenish their offerings as older patents expire. This followed months of negotiations and was greeted well by the markets, with the pharmaceutical giant and Human Genome up 0.7% and 4.5% respectively. The trend continued, as Thermo Fisher acquired One Lambda, a transplant diagnostics company, for $925 million in an all-cash deal. The medical instrument maker believes that this will provide a promising addition to their diagnostic offerings. The buyer fell 0.3%. TPG Capital purchased Par Pharmaceutical for $1.9 billion. This leveraged buyout agreement follows an auction process during which several private equity firms expressed interest in Par. The generic drug maker jumped 37%, in line with the premium offered. Also that day, Regis Corporation divested its hair restoration unit to Aderans, a Japanese wig maker, for $163.5 million. This move is part of a wider strategy by the hair care giant to refocus on its core businesses; it is also believed that other non-core units are also being assessed. The vendor and Aderans gained 2.2% and 1% respectively.

The following day, State Street absorbed Goldman Sachs’ hedge fund administration unit for $550 million. The deal will make the bank the largest provider of back-office services to hedge funds in the world; an area which has become much more lucrative in the past few years. State Street lost 6.4% while the seller was lifted 0.3%. TiVo took over TRA, a group which correlates viewing activity to consumer spending habits, for $20 million. This is expected to allow advertisers to pick networks and shows best positioned to sell their products. The television software company closed 0.3% higher. Autodesk acquired video authoring and publishing company Socialcam for $60 million. This comes as the design software maker is moving towards less-specialized products with mass market appeal. The bidder grew by 1.7%. Thursday brought the news that Cable operator Suddenlink Communications would be sold to BC Partners and the Canada Pension Plan Investment Board for $6.6 billion. Despite economic woes, defensive investors have noted that consumer demand for broadband, telephone and television services has remained strong. Georgia Gulf purchased the commodities unit of fellow chemicals firm PPG Industries for $2 billion. This will allow the PPG to focus on its core coatings business while making their counterparty a market leader for certain chemicals. The seller and Georgia Gulf were up 7.5% and 13% respectively. Also that day, Penguin Publishing absorbed Author Solutions, which allows people to publish their own books, for $116 million. Recently there has been a large shift towards self-publishing, and Penguin is hoping to derive value from the pool of almost 200,000 books that the target has published.

Friday, 13 July 2012

Mergers & Acquisitions - Week Ending 07/13/12

On Monday, the Campbell Soup Company acquired rival Bolthouse Farms for $1.55 billion. This will allow the buyer to strengthen its beverage unit in the face of slowing soup sales. The food company lost 0.8%. WellPoint purchased health benefits specialist Amerigroup for $4.9 billion in an all-cash deal. The insurer sees this as a handsome addition to its portfolio as Obama’s Affordable Care Act comes into effect; giving it an impressive share of both the Medicaid and Medicare markets.  The bidder was up 3.4%, while Amerigroup jumped 38%; 5% below the premium offered. Later that day, Intel bought a 15 percent stake in ASML Holding for $4.1 billion. They plan to use their stake in the semiconductor supplier to fast-track the development of a new technology called extreme ultraviolet lithography. The chipmaking giant fell 2.3% as the target was boosted 8.5%.

The following day, Comcast agreed to sell a 15.8 percent stake in A&E to its owners Walt Disney and Hearst for $3 billion. The television network has performed well since its inception in 2009. Comcast increased by 0.26%, while the entertainment giant dropped 1.3%. On Thursday it was announced that Dentsu would buy Aegis for $4.92 billion. The Asian advertising company will be looking to use this deal as a springboard for international expansion. Dentsu was down 7% while their British rival soared 44%, reflecting the large premium offered. Also that day, private equity firm Permira sold Valentino Fashion Group to Mayhoola for Investments for $856 million. Many luxury brands have managed compensate for growth lost in Europe by going global; the fashion house is currently seeing strong expansion in emerging markets. 

Friday, 6 July 2012

Mergers & Acquisitions - Week Ending 07/06/12

Over the weekend, Linde purchased Lincare Holdings, a provider of respertory systems for homes, for $3.8 billion. The buyer believes that the deal will strengthen their healthcare unit and their presence in the US. The gas products firm gained 1.6% as the target jumped 22%, reflecting the large premium offered. A hectic Monday began with the news that Micron Technology would buy bankrupt rival Elpida Memory for $2.5 billion. The memory specialist sees this as an opportunity to expand its manufacturing base in Asia at a low cost. They were up 3.8%. The tech trend continued as Dell took over Quest Software for $2.4 billion. This is the latest step by the PC manufacturer towards the higher margin software business. Dell lost 1% while the enterprise software group was relatively unchanged. GE Capital sold its business property lending unit to EverBank Financial for $2.51 billion. This comes as General Electric’s financial arm looks to bolster its balance sheet in the wake of the economic crisis. EverBank, a NYSE newcomer, grew by 4.4% as the vendor’s parent fell 1.7%. 

CEB absorbed SHL, which provides talent analytics, for $660 million in an all-cash deal. The bidder is hoping that SHL’s cloud-based technologies can help its advisory business in its global strategy. CEB increased by 1.9%. Also that day, electronic payments firm Cielo bought rival Merchant e-Solutions for $670 million. This is expected to allow Cielo to widen its span of Brazillian influence from retail to online. They gained 2.4%. The week’s two remaining deals came on Thursday, when Volkswagen purchased the half of Porsche that it didn’t own for $5.58 billion. This news, which ironically started with Porsche trying to absorb the buyer, has been two years in the making; with negotiations yielding little results until recently. The markets sided with Volkswagen; the auto giant was boosted 6.2% while the target decreased 5.9%. Also that day, Walgreen announced its takeover of a pool of US drugstores for $438 million. This is the latest in a string of acquisitions, both national and international, by the pharmacy powerhouse. They were up 0.9%.