Monogram Residential Trust Sold for $3 Billion

Monogram Residential Trust sold for $12 per share in cash

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Monogram Residential Trust (MORE) announced that it has entered into a definitive merger agreement to be acquired by a newly formed perpetual life fund, Greystar Growth and Income Fund, in a transaction valued at approximately $3B, including debt to be assumed or refinanced.

Monogram Residential Trust, Inc. is an equity real estate investment trust. The trust invests in the real estate markets of United States. It engages in investment, development and operation of real estate assets. The trust’s portfolio comprises of high-quality multifamily communities, including conventional multifamily assets, such as mid-rise, high-rise, and garden-style properties; age-restricted residences and student housing

Under the terms of the merger agreement, which was unanimously approved by board, Monogram’s stockholders will receive $12.00 per share in cash.

This represents a premium of approximately 22% to Monogram’s unaffected closing stock price on July 3.

The $3B aggregate transaction value includes Monogram’s share of its two institutional co-investment joint ventures with PGGM and NPS.

The PGGM joint venture will be restructured, and the joint venture interests held by NPS will be purchased by Greystar pursuant to a separate assignable purchase and sale agreement for approximately $500 Million, subject to certain adjustments at closing, including payment of the NPS joint venture’s share of debt to be assumed or refinanced in connection with the transaction.

The transaction is expected to close in the second half of 2017 and is subject to approval by Monogram’s stockholders and other customary closing conditions.

The transaction is not contingent on receipt of financing by Greystar.

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JANA Partners Opposes Purchase of Rice Energy

JANA pushes EQT for ‘immediate breakup’ over Rice Energy deal

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JANA Partners disclosed a new 5.8% stake in EQT Corporation (EQT) in a regulatory filing that allows for activism.

Background

On June 19th, 2017, EQT Corporation (EQT) and Rice Energy (RICE) announce that they have entered into a definitive merger agreement under which EQT will acquire all of the outstanding shares of Rice common stock for total consideration of approximately $6.7B – consisting of 0.37 shares of EQT common stock and $5.30 in cash per share of Rice common stock.

Shares Undervalued

JANA says it acquired the shares because they believe the stock is “undervalued” and represents an “attractive investment opportunity.”

JANA added that it has “substantial experience analyzing and investing in the energy sector.”

JANA, with the assistance of others, intends to have discussions with EQT’s shareholders, board of directors and management regarding the voting against shareholder approval of the acquisition of Rice Energy (RICE) as well as pursuing an “immediate breakup” of the company into a separately traded E&P business and midstream business in order to realize the company’s “full value and potential strategic value.”

JANA also seeks to optimize EQT’s capital allocation and board structure.

It added, “JANA is also prepared, if necessary, to nominate individuals for election to the Issuer’s board of directors and to participate in the solicitation of proxies in support of such individuals, and has signed Nomination Agreements.”

JANA entered into nomination agreements with Edward Cohen and Daniel Herz.

Price Action

Shares of EQT Corporation are up 1% to $59.11 in Monday trading. Rice Energy (RICE) is down 6% to $25.09.

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Total Gets $5 Billion Iranian Contract

Total, NIOC sign 20-year contract for development of Phase 11 of South Pars gas field

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Total (TOT) and the National Iranian Oil Company have signed a contract for the development and production of phase 11 of South Pars, the world’s largest gas field.

The project will have a production capacity of 2B cubic feet per day or 400,000 barrels of oil equivalent per day including condensate.

The produced gas will supply the Iranian domestic market starting in 2021.

This contract, which has a 20-year duration, is the first Iranian Petroleum Contract and is based on the technical, contractual and commercial terms as per the Heads of Agreement signed on November 8, 2016.

Total is the operator of the SP11 project with a 50.1% interest alongside the Chinese state-owned oil and gas company CNPC, and Petropars, a wholly owned subsidiary of NIOC.

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Bankrate Sold for $1.4 Billion

Bankrate to be acquired by Red Ventures for $14.00 per share in cash

 

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Bankrate (RATE) announced that it has entered into a definitive agreement to be acquired by Red Ventures, a digital consumer choice platform, in an all-cash transaction that values Bankrate at an enterprise value of approximately $1.4B.

Under the terms of the merger agreement, Bankrate shareholders will receive $14.00 per share in cash, which represents a premium of approximately 31% over Bankrate’s three-month average closing share price.

Bankrate, Inc. operates as a publisher, aggregator, and distributor of personal finance content on the Internet. It provides personal finance editorial content across various categories, including credit cards, mortgages, deposits, senior care, and others.

The merger agreement has been unanimously approved by Bankrate’s board.

The combination will create a scaled and diversified digital platform of consumer marketplaces. The transaction is expected to close in 2017.

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NCI, Inc. Sold for $283M in cash

NCI, Inc. to be acquired by H.I.G. Capital for $20 per share in cash

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NCI, Inc. (NCIT) announced that it has signed a definitive agreement to be acquired by private funds managed by an affiliate of H.I.G. Capital, a leading global private equity investment firm, in an all-cash transaction valued at approximately $283M.

NCI, Inc. provides information technology (IT) and professional services and solutions to defense, intelligence, healthcare, and civilian government agencies worldwide.

Under the terms of the definitive agreement, H.I.G. will commence a tender offer no later than July 17, 2017, to acquire all outstanding shares of NCI’s Class A and Class B common stock for $20.00 per share in cash.

NCI’s board of directors has unanimously approved the transaction. Concurrently with the execution of the merger agreement, the chairman of the board of NCI, Charles Narang, in his capacity as a stockholder of the company, entered into a tender and support agreement pursuant to which he will, subject to certain exceptions, tender all of his shares of NCI common stock in favor of the offer.

NCIT closed at $21.10.

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MRV Communications Sold for $69 Million

MRV Communications enters agreement to be bought for $10 per share

 

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ADVA Optical Networking announced that it has entered into a definitive agreement to acquire MRV Communications (MRVC).

Under the terms of the agreement, ADVA Optical Networking will make a tender offer of $10.00 per share for all the outstanding common stock of MRV.

The offer equates to an aggregate purchase price of $69M and has been approved and unanimously recommended by both the board of directors of ADVA Optical Networking and the board of directors of MRV Communications.

The acquisition is subject to customary closing conditions, including the tender of at least a majority of MRV’s outstanding shares of common stock.

MRV Communications, Inc. designs, manufactures, distributes, and services optical networking solutions and Internet infrastructure products worldwide. It offers optical transport, packet/carrier Ethernet, network management, and infrastructure management products and services. The company also provides out-of-band network equipment, as well as designs and manufactures fiber optic modules for the fiber-optic communications industry. Its portfolio of packet and optical solutions enable the access, aggregation, transport, and management of various communications traffic for fixed line, cable, content delivery, cloud-based, and mobile communications networks.

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MRVC closed at $9.85.

Parkway Properties Sold for $1.2 Billion

Canada Pension Plan Investment Board to acquire Parkway for $1.2B

Canada Pension Plan Investment Board to acquire Parkway for $1.2B, See Stockwinners Market Radar. Stockwinners offers winning stock research since 1998

Canada Pension Plan Investment Board and Parkway (PKY) announced that they have entered into a definitive agreement under which CPPIB will acquire 100% of Parkway, a Houston-based real estate investment trust, for$1.2B, or $23.05 per share.

The transaction is not subject to a financing condition and is expected to close in the fourth quarter of 2017, subject to customary closing conditions, including approval by Parkway’s stockholders.

The $23.05 per share consideration, which consists of $19.05 per share plus a $4.00 special dividend to be paid prior to closing, represents a premium of approximately 14.3% when compared to Parkway’s 30-day volume weighted average price ended June 29, 2017 and a premium of approximately 13.1% when compared to the prior closing price.

Parkway, Inc. operates as a real estate investment trust in the United States. It engages in the ownership, acquisition, development, and leasing of office assets in Houston, Texas submarkets. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. #REIT

Canada Pension Plan Investment Board is a professional investment management organization that invests the funds of the Canada Pension Plan on behalf of its 20 million Canadian contributors and beneficiaries.  The #CPPIB emerged out of the realization in the 1990s that the CPP fund was unsustainable primarily because changing demographics were leading to fewer workers supporting a growing number of retirees. Federal and provincial finance ministers created the CPP Investment Board.

Parkway’s board of directors unanimously approved the agreement. TPG Capital and its affiliates, which collectively own approximately 9.8% of the outstanding common stock of Parkway, have agreed to vote in favor of the transaction.

Parkway will pay its previously announced second quarter dividend on June 30, 2017, but will suspend all future quarterly dividend payments through the expected close of the transaction.

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West Marine Sold for $338 Million

West Marine to be acquired by Monomoy Capital for $12.97 per share

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West Marine (WMAR) and Monomoy Capital Partners announced that they have executed a definitive merger agreement under which a wholly owned affiliate of Monomoy will acquire all of the outstanding shares of common stock of West Marine at $12.97 per share in cash, which represents a total equity value of $338M.

This price represents a premium of 32% over the 30-day average performance of West Marine’s stock price reported on NASDAQ.

Company founder and board member, Randy Repass, has entered into a voting agreement whereby he and his affiliated entities over which he has sole or shared voting have agreed to vote shares representing approximately 20% of the company’s voting power in favor of the transaction.

Following the close of the transaction, West Marine will be privately held and continue to be operated independently by the company’s management team.

The transaction, which has been unanimously approved by West Marine’s Board of Directors, is expected to close in the third quarter of this year, subject to West Marine’s stockholder approval and other customary closing conditions.

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Bank of America Ups Airlines

BofA/Merrill raises Airline estimates, Delta and Southwest best positioned

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BofA/Merrill analyst Andrew Didora raised Airline estimates and price target to reflect lower fuel pricing and remains positive on the industry said to remain selective into second-half 2017.

The analyst believes Buy rated Delta Air Lines (DAL) and Southwest (LUV) are best positioned for sequential unit revenue improvement in the second half due to decelerating and easing comps and raised their price targets to $71 and $75 from $64 and $62, respectively.

The analyst expects capacity to increase modestly in 2018 to +3.4% from +2.8% in 2017 and expects Delta to accelerate capacity growth to +1.9% and Southwest to +5%.

As part of the sector note, Didora raised Buy rated United Continental’s (UAL) price target to $105 from $85, Alaska Air’s (ALK) to $120 from $115, Spirit Airlines’ (SAVE) down to $68 from $75, and raised Underperform rated American Airlines’ (AAL) to $42 from $40 and lowered Hawaiian Holdings’ (AAL) to $43 from $47.

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ScanSource to Buy POS Portal for $145 Million

ScanSource announces agreement to acquire POS Portal for $144.9M

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ScanSource (SCSC) announced a definitive agreement to acquire POS Portal, a distributor of payment devices and services primarily to the SMB market segment.

“ScanSource and POS Portal will create the industry’s largest payments channel, ensuring customers have access to the solutions, services and support that can help them be successful,” the company said.

The two companies sell through complementary solution delivery channels with little customer overlap. ScanSource primarily serves the enterprise and mid-market merchant segments, with thousands of POS value-added resellers and system integrators as customers.

POS Portal reaches the SMB merchant segment via strong relationships with the leading payment processors, independent sales organizations and many of the leading tablet-based POS software developers.

For the first full year after closing, POS Portal net sales are estimated to total approximately $110M with an estimated EBITDA margin in the low teens.

Under the agreement, the all-cash transaction includes an initial purchase price of approximately $144.9M, plus an earn-out payment up to $13.2M to be made on November 30.

The earn-out payment is based on earnings before interest expense, taxes, depreciation and amortization for the trailing twelve months ending September 30.

The acquisition is expected to be accretive to earnings per share in the first year after acquisition, excluding one-time acquisition costs.

POS Portal CEO Buzz Stryker and Scott Agatep, Chief Operating Officer, along with the POS Portal team, will join ScanSource and provide the leadership and direction in further developing the ScanSource payments business.

Upon completion of the transaction, POS Portal will become part of the Worldwide Barcode, Networking and Security segment of ScanSource.

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Walgreen Dumps Rite Aid, Buys 2186 Stores Instead

Rite Aid, Walgreens terminate prior deal, Rite Aid agrees to sell stores instead

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Rite Aid (RAD) announced that it has entered into an asset purchase agreement with Walgreens Boots Alliance (WBA), whereby WBA will acquire 2,186 stores, related distribution assets and inventory from Rite Aid for an all-cash purchase price of $5.175B, on a cash-free, debt-free basis.

Under the terms of the agreement, Rite Aid has the option to purchase generic drugs that are sourced through an affiliate of WBA at cost, substantially equivalent to Walgreens for a period of 10 years.

The 2,186 stores included in the agreement are primarily located in the Northeast, Mid-Atlantic and Southeastern regions of the United States. The three distribution centers included in the agreement are located in Dayville, Conn., Philadelphia and Spartanburg, S.C.

Under the terms of the agreement, Rite Aid will provide certain transition services to WBA for up to three years after the closing of the transaction.

The transaction, which is expected to close within six months, has been approved by the Boards of Directors of Rite Aid and WBA and is subject to antitrust clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

Approval of this transaction does not require a shareholder vote. Rite Aid expects to use a substantial majority of the net proceeds from the transaction to repay existing indebtedness, significantly reducing Rite Aid’s leverage levels.

Rite Aid also expects that the federal tax gain on the sale of the assets will be largely offset by its net operating loss carryforwards, resulting in a minimal cash tax payment on this transaction.

Following the completion of the transaction, Rite Aid will continue to operate EnvisionRx, its pharmacy benefit manager, RediClinic and Health Dialog and leverage the capabilities of these subsidiaries to deliver a higher level of care in the communities it serves.

The company also announced the immediate termination of the merger agreement, which was announced on October 27, 2015 and amended on January 29, 2017, under which WBA would have acquired all outstanding shares of Rite Aid. The decision to terminate the merger agreement follows feedback received from the Federal Trade Commission that led the company to believe that the parties would not have obtained FTC clearance to consummate the merger.

In connection with the termination, WBA has agreed to pay Rite Aid a termination fee in the amount of $325M in cash.

In light of the termination of the merger agreement, the divestiture agreement with Fred’s (FRED) was also terminated, effective today.

Price Action:

RAD closed at $3.93. Shares last traded at $3.05 in pre-market. FRED closed at $12.32, last traded at $9.85. WBA closed at $77.09, last traded at $81.00.

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Staples Sold for $10.25 a Share

Staples to be acquired by Sycamore Partners for roughly $6.9B

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Staples and Sycamore Partners announced that they have entered into a merger agreement in which investment funds managed by Sycamore Partners will acquire the company in a transaction that values Staples at an equity value of approximately $6.9B.

Under the terms of the merger agreement, all Staples’ stockholders will receive $10.25 per share in cash for each share of common stock they own, which represents a premium of approximately 20% to the 10-day volume weighted average stock price for Staples shares for the period ended April 3, 2017, the last trading day prior to widespread media speculation about a potential transaction.

Staples’ Board of Directors has unanimously approved the merger agreement and recommends that all Staples stockholders vote in favor of the transaction.

The transaction is subject to customary closing conditions, including the receipt of regulatory and stockholder approval, and is expected to close no later than December, 2017. The closing is not subject to a financing condition.

See our earlier post regarding Staples.

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Nutanix Higher on Google Deal

Nutanix jumps after announcement of Google cloud partnership

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Shares of Nutanix (NTNX) are rising in pre-market trading after the company and Google parent Alphabet (GOOG) announced a partnership via which Nutanix customers will be able to easily move application workloads to Google’s cloud, according to CNBC.

Nan Boden, Google’s head of global alliances, told CNBC that in terms of the public cloud, “you have to meet them where they are — that’s becoming increasingly clear.”

Nutanix intends to support application deployment on Amazon’s (AMZN) AWS and Microsoft’s (MSFT) Azure, although at this point it’s working most closely with at Google, CNBC added.

The first integration resulting from the partnership, which will enable applications to move from on-premise data centers to Google’s, will become available in the first quarter of 2018. Pricing details aren’t available, CNBC noted.

The deal is another indication that Nutanix, which held its IPO last year, is now embracing the public cloud as a viable infrastructure choice. Simultaneously it reflects how Google is becoming more receptive to the needs of enterprises.

NTNX closed at $18.64. The issue has a 52-weeks trading range of $14.38 – $46.78.

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Spectranetics Sold for $2.1 Billion

Philips to acquire Spectranetics for $38.50 per share in cash

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Royal Philips (PHG) and Spectranetics (SPNC) announced that they have entered into a definitive merger agreement. Pursuant to the agreement, Philips will commence a tender offer to acquire all of the issued and outstanding shares of Spectranetics for $38.50 per share, to be paid in cash upon completion. This represents a 27% premium to Spectranetics closing price on June 27.

The implied enterprise value is approximately EUR 1.9B, inclusive of Spectranetics’ cash and debt.

The board of directors of Spectranetics has approved the transaction and recommends the offer to its shareholders.

The transaction is expected to close in Q3. Spectranetics is currently growing double digits and projects 2017 sales to be in the range of $293M-$306M. Upon completion of the transaction, Spectranetics and its more than 900 employees will become part of the Image-Guided Therapy Business Group within Philips.

Spectranetics’ standalone revenue growth is expected to be double-digit and adjusted EBITA to be positive by 2018. Philips sees sustained high sales growth through new product introductions across a highly synergistic therapy device portfolio.

Moreover, the transaction will enhance the geographical expansion of Spectranetics’ products and commercialization opportunities in new, adjacent segments.

As part of Philips, the Spectranetics business will benefit immediately from Philips’ platform enabling cost and working capital synergies. As a result, the combined Spectranetics and Philips Image Guided Therapy Devices business, within the Image-Guided Therapy Business Group, is expected to grow to approximately EUR 1B by 2020.

For the overall Image-Guided Therapy Business Group, Philips targets a high single-digit comparable sales growth and high-teens adjusted EBITA margin for the medium-term. In 2016, this business group reported sales of approximately EUR 1.9B of which approximately 20% was attributable to device sales.

The transaction is expected to be accretive to Philips’ revenue growth, adjusted EBITA margins and adjusted EPS by 2018.

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First Potomac Sold for $1.4 Billion

First Potomac shareholders will receive $11.15 in cash per share

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First Potomac Realty Trust (FPO) announced that it has entered into a definitive merger agreement with Government Properties Income Trust (GOV) under which GOV will acquire all of the outstanding shares of First Potomac.

The transaction, which is valued at $1.4B, including the assumption of debt, is expected to close prior to year end 2017.

Under the terms of the agreement, First Potomac shareholders will receive $11.15 in cash per share at the close of the transaction. This represents a premium of approximately 9.3% to First Potomac’s 30-trading day Volume Weighted Average Price ended April 24, the last trading day before media speculation regarding a potential sale of First Potomac.

The transaction is subject to customary closing conditions, including approval by First Potomac shareholders at a special meeting. The Board of Trustees of First Potomac has unanimously approved the merger agreement and has recommended approval of the merger by First Potomac’s shareholders.

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