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.