Albany Molecular Is For Sale

PE Firm Carlyle Group is in talks to purchase Albany Molecular

Albany Molecular $AMRI is a contract research and manufacturing company

 

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Albany Molecular Research $AMRI is a contract research and manufacturing company. The Company operates through Discovery and Development Services (DDS), Active Pharmaceutical Ingredients (API), Drug Product (DP) and Fine Chemicals (FC) segments.

Reuters reports that private equity firms GTCR LLC and Carlyle Group LP $CG are in talks to team up and jointly acquire Albany Molecular. Negotiations are ongoing, and there is no certainty that the talks will lead to Albany Molecular Research being taken private, the report said.

Drug manufacturers are under pressure to lower drug costs and that has created M&A activities in the sector. Other stocks in the sector that might be looked as potential take over targets include: #Cambrex Corporation $CBM , Charles River Labs. $CRL , Emergent Biosolutions $EBS . TESARO $TSRO , the oncology-focused biopharmaceutical company, recently announced that it is shopping itself.

AMRI last traded at $19.91.

The Carlyle Group L.P.  $CG is a diversified multi-product global alternative asset management firm. The Company operates in four segments: Corporate Private Equity (CPE), Real Assets, Global Market Strategies (GMS) and Investment Solutions. Corporate Private Equity advises its buyout and growth capital funds, which pursue various corporate investments of different sizes and growth potentials.

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Athenahealh Could Be in Play!

Citi says can’t rule out athenahealth sale with Elliott involved

potential acquirers of athenahealth include tech companies aiming to build a healthcare presence

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#Citi analyst Garen #Sarafia raised his price target on #athenahealh $ATHN saying Elliot Associates’ recently disclosed stake in the company reinforces his favorable view and likely provides a support level for shares.

Additionally, a sale of the company “cannot be ruled out” given the activist investor’s track record, Sarafia argues.

BACKGROUND:

On May 18, Elliott Associates, Elliott International and #EICA disclosed in a regulatory filing that they collectively have combined economic exposure in athenahealth of approximately 9.2% of the common stock outstanding.

Elliott said it may “consider, explore and/or develop plans and/or make proposals” to athenahealth and intends to communicate with the company’s management and board “about a broad range of operational and strategic matters.”

CITI UPS TARGET

Sarafia raised his price target for athenahealth to $163 from $128 citing Elliott’s involvement, pointing out that in the investors’ engagement in nearly 40 campaigns since 2013, slightly over half of which resulted in a sale.

As a result, he believes potential #M&A scenarios “cannot be ruled out.” The analyst said potential acquirers of athenahealth would include tech companies aiming to build a healthcare presence, including #IBM $IBM , which has made several recent acquisitions to bolster its healthcare network. He added that #Aetna $AET ) and #UnitedHealth $UNH , through its Optum business, may also be potential suitors, although UnitedHealth is currently under agreement to use #Allscripts $MDRX software.

Sarafia added more distant possibilities include healthcare tech companies #Cerner $CERN or privately-held Epic. He, however, believes a “collaborative engagement to unlock sustainable value” is a likely scenario over an acquisition, citing the company’s history of engagement with large shareholders.

In addition, Sarafia said the activist stake will make operational improvements at the company a high priority, with a renewed focus on core strengths, potential cost-cutting in general and administrative expenses and possibly research and development, and increased free cash flow. He keeps a Buy rating on the shares.

PRICE ACTION: In Monday trading, athenahealth rose nearly 1% to $139.30. The stock has a 52-week trading range of $90.11 – $142.40.

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Gigamon is For Sale

Gigamon makes software that is installed in large data centers to boost the flow of traffic

Elliott Management owns 15% of shares and has encouraged firm to sell

 

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After activist investor Elliott Associates recently reported a roughly 15% economic exposure in shares of #Gigamon $GIMO and encouraged the company to undertake a strategic review process, the software maker has begun working with Goldman Sachs $GS to talk with companies and private equity firms interested in acquiring it, according to Reuters.

Gigamon Inc. develops and delivers solution that delivers visibility and control of data-in-motion traversing enterprise, federal, and service provider networks in the United States, rest of Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers traffic intelligence applications that provide controls for traffic selection, forwarding, manipulation, modification, de-duplication, SSL decryption, correlation, sampling, and generation of flow records.

Gigamon could attract interest from Hewlett Packard Enterprise (HPE), F5 Networks (FFIV) and PE firm Thoma Bravo, which previously bought Riverbed Technology, according to the report.

Needham analyst Alex Henderson estimated that a fair value for Gigamon is in the $50-$55 range.

Elliott has succeeded in pushing many technology companies to sell themselves in recent years, including Mentor Graphics, LifeLock Inc and Qlik Technologies.

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May’s Job Report Disappoints!

U.S. nonfarm payrolls rose only 138k in May, disappointing estimates for a near 200k gain

The unemployment rate dropped to 4.3% versus 4.4% previously

 

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U.S. nonfarm payrolls rose only 138k in May, disappointing estimates for a near 200k gain, following a downwardly revised 174k increase in April (was 211k) and a 79k gain in March.

The unemployment rate dropped to 4.3% versus 4.4% previously.

Average hourly earnings rose 0.2% as was the case in April (revised from 0.3%). The workweek was steady at 34.4.

For the internals, the labor force plunged 429k after April’s 12 rise, with household employment tumbling 233k from 156k.

Private payrolls were up 147k compared to the 253k jump in the ADP, while government subtracted 9k.

Jobs in the goods producing sector were up 16k, with construction increasing 11k and manufacturing falling 1k.

The service sector added 131k jobs, led by education/health with a 47k gain, while business services jobs were up 38k.

Declines were registered in trade/transport and information services.

The disappointing report will knock bond yields lower but shouldn’t seriously impact expectations for a Fed rate hike on June 14. The dollar is lower following the job report as some hope that FOMC may not raise interest rates at its next meeting.

Stocks to watch: MAN, RHIKELYATMH, ASGN, KFRC

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Pinnacle Foods Could be Sold

Three years ago, Pinnacle Foods agreed to a takeover of $4.3 billion by Hillshire Brands. That deal was canceled after Hillshire agreed to sell itself to Tyson Foods.

 Hillshire was led at the time by Sean Connolly, who is now chief executive of Conagra. 

Reuters reports that ConAgra Brands (CAG) has approached Pinnacle Foods (PF) for a takeover.

Conagra’s approach to Pinnacle Foods took place in the last few weeks. There is no assurance that Pinnacle Foods will choose to walk down the alter, or that Conagra will pursue a potential deal further, the report said.

Pinnacle Foods operates through four segments: Frozen, Grocery, Boulder, and Specialty. The Frozen segment offers brands such as the Bird’s Eye,  Van de Kamp’s, Mrs. Paul’s, Lender’s, Celeste, Hungry-Man, and Aunt Jemima names. The Grocery segment brands include the Duncan Hines, Vlasic, Wish-Bone, and Mrs. Butterworth’s.

Conagra Brands, Inc. (CAG) operates as a food company in North America. It operates through five segments: Grocery & Snacks, Refrigerated & Frozen, International, Foodservice, and Commercial.  The company markets its products primarily under the Healthy Choice, Hunt’s, Slim Jim, Reddi-wip, Alexia, Blake’s, Frontera, Bertolli, P.F. Chang’s, and Marie Callender’s brands.

What Goes Around, Comes Around

Three years ago, Pinnacle Foods agreed to a takeover of $4.3 billion by Hillshire Brands. That deal was canceled after Hillshire agreed to sell itself to Tyson Foods Inc for $7.7 billion.  Hillshire was led at the time by Sean #Connolly, who is now chief executive of Conagra.

Connolly’s second attempt at an acquisition of Pinnacle Foods underscores the need for further consolidation in the frozen food and condiments sectors, as sales continue to decline with consumers opting for healthier choices.

Conagra has been seeking to reinvent itself since selling its private label unit for $2.7 billion in 2016 to focus on its branded food business. Last year it spun off its $6.9 billion frozen potato business, Lamb Weston Holdings Inc. This week it agreed to sell its Wesson oil brand to Folgers coffee maker J.M. Smucker for $285 million.

Conagra has a market cap of $17 billion while Pinnacle has a market cap of less than $8 billion.

Price Action

PF shares last traded at $62.31. It has a 52-week trading range of $42.09 – $66.50

CAG last traded at $39.78. CAG has a 52-week trading range of $33.08 – $41.68.

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Dakota Access Pipeline Begins Carrying Oil

The “Bakken Pipeline” begins carrying oil

The Bakken Pipeline is a 1,872-mile, mostly 30-inch pipeline system that transports domestically produced crude oil from the Bakken/Three Forks productions areas in North Dakota to a storage and terminalling hub outside Patoka, Illinois, and/or down to additional terminals in Nederland, Texas.

 

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Bakken Pipeline is a 1872 mile, 30-inch diameter line

Energy Transfer Partners (ETP) announced that the #DakotaAccess Pipeline and the Energy Transfer Crude Oil Pipeline, collectively the “Bakken Pipeline,” are in commercial service under the Committed Transportation Service Agreements through their respective pipeline systems.

The #Bakken Pipeline, owned by Dakota Access, LLC and Energy Transfer Crude Oil Company LLC, respectively, is a 1,872-mile, mostly 30-inch pipeline system that transports domestically produced crude oil from the Bakken/Three Forks productions areas in North Dakota to a storage and terminalling hub outside Patoka, Illinois, and/or down to additional terminals in Nederland, Texas.

The Bakken Pipeline is a joint venture between Energy Transfer Partners with a 38.25 percent interest, MarEn Bakken Company LLC with a 36.75 percent interest, and Phillips 66 (PSX) with a 25 percent interest.

MarEn is an entity owned by MPLX LP (MPLX) and Enbridge Energy Partners L.P. (EEP).

Dakota Access and ETCO, developed at a combined cost of approximately $4.78 billion have commitments, including shipper flexibility and walk-up, for approximately 520,000 barrels per day. This is up from 470,000 barrels per day due to the successful Supplemental Open Season held earlier this year that committed an additional 50,000 barrels per day.

The combined system is expandable to a capacity of approximately 570,000 barrels per day. The pipeline will transport light, sweet crude oil from North Dakota to major refining markets in a more direct, cost-effective, safer and more environmentally responsible manner than other modes of transportation, including rail or truck.

Energy Transfer Partners approved and announced the pipeline project on June 25, 2014. In October 2014, Phillips 66 acquired 25% stake in the project. Since then, the project has been controversial. The firm had to fight several lawsuits to secure right-of-way for the project. The company was sued by Indian tribes, Iowa farmers, and environmental groups. The U.S. Army Corp of Engineers ( #USACE ) got involved and the entire project became a political issue. On November 1, 2016, President #Obama announced his administration was monitoring the situation and had been in contact with the USACE to examine the possibility of rerouting the pipeline to avoid lands that Native Americans hold sacred.

On January 24, 2017, President Donald #Trump, in contrast to the Obama administration, signed a presidential memorandum to advance the construction of the pipeline under “terms and conditions to be negotiated.”

Energy Transfer Partners began loading the pipeline with crude oil by April 2017. A small, 84-gallon spill of crude oil occurred at a South Dakota pumping station on the route on April 6, 2017. With full operation, East Coast refineries reduced their orders for rail-delivered oil in May and June.

Crude oil last traded at $50.68 per barrel.

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Blackstone to sell Logicor to China Investment

China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

Blackstone originally considered steering Logicor to an IPO, Deal could be announced this week

If completed, the transaction would mark Europe’s largest-ever real estate deal. 

 

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China Investment Corporation (CIC) is in advanced negotiations to acquire Blackstone’s European logistics platform for over $13.4 billion.

China’s sovereign wealth fund has reportedly moved ahead of rivals in the pursuit of the Logicor warehouse portfolio, after formal bids having been submitted by last Thursday.

CIC is now said to be scheduled to sign a deal for Blackstone’s (BX) giant’s 630 European distribution centers within the next two to three days. If completed, the transaction would mark Europe’s largest-ever real estate deal.

In March, Blackstone began shopping Logicor to institutional investors including CIC, #Singaporean warehouse group Global Logistics Properties (GLP), and a joint venture between Singapore’s #Mapletree Investments and #Temasek Holdings. The sale of the 146.4 million square foot warehouse platform would mark the biggest logistics property deal in history.

CIC is said to benefit from its close relationship with #Blackstone.  In January 2014, CIC purchased London’s Chiswick Park office complex from Blackstone for over $1.28  billion.

Blackstone originally considered steering Logicor to an IPO, but is reported to have shelved that option in favor of a trade sale, aggressively driving the bidding process forward over the past few weeks. A trade sale would potentially achieve a higher price while allowing Blackstone to dispose of the business in a faster and more efficient manner than an #IPO.

Logicor was founded by Blackstone’s real estate business in 2012 and has rapidly grown into one of Europe’s largest warehousing specialists, with modern logistics facilities in 17 countries across the continent. Investors continue to pile into the logistics real estate sector amidst a boom in online retail, soaring prices and relatively high yields compared to other property asset classes.

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Tegna may be a takeover target

Consolidation in Media Companies is underway

Tegna recently spun off Cars.com, CareerBuilder might be next

 

tegna-logo

Tegna (TGNA) may be a takeover target of Nexstar (NXST), Dealreporter says.

#Tegna, formerly known as Gannett, engages in media and digital businesses in the United States.

The company operates in two segments, Media and Digital. It operates 46 television stations that produce local programming, such as news, sports, and entertainment. The company also operates Cars.com, an online destination for automotive consumers that offers information about car shopping, selling, and servicing; CareerBuilder, which provides human capital solutions. The company has a market capitalization of $5.1 billion.

nxst

#Nexstar Media Group $NXST operates as a television broadcasting and digital media company in the United States. It focuses on the acquisition, development, and operation of television stations and interactive community Websites in medium-sized markets. The company offers free over-the-air programming to television viewing audiences. It also provides sales, programming, and other services through various local service agreements to 30 power television stations owned and/or operated by independent third parties. The company has a market capitalization of $2.7 billion.

Media companies in recent months have been looking for mergers to improve their earnings and competition from various internet based media compete for advertisers dollars. YouTube (GOOG) has recently offered a service similar to cable companies for $35 per month. YouTube will take a cut from advertising dollars that are sold on its network.

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