US Ecology and NRC Group to merge

US Ecology, NRC Group to merge in all-stock transaction

US Ecology and NRC Group to merge, Stockwinners

US Ecology (ECOL) announced that it has entered into a definitive merger agreement with NRC Group Holdings (NRCG) in an all-stock transaction with an enterprise value of $966M.

U.S. Ecology and NRC Group to merge, Stockwinners

The transaction is expected to close in the fourth quarter and is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, respective stockholder approvals and other customary closing conditions.

The transaction will create a nationwide leader in industrial and hazardous waste management services and is projected to be mid-single digit accretive to US Ecology’s 2020 adjusted earnings per share, before synergies.

The transaction has been approved by both companies’ Boards of Directors.

Upon completion of the transaction, US Ecology stockholders will own approximately 70% of the combined company, and NRCG stockholders will own approximately 30% on a fully diluted basis.

The combined company will use the US Ecology name, and its shares will continue to be listed on the Nasdaq Global Select Market under the ticker ECOL.

Jeffrey Feeler will continue to serve as President, CEO and Chairman of the Board of Directors.

The company will maintain its headquarters in Boise, Idaho with regional support centers in Boise, Detroit, New York and Houston.

Under the terms of the merger agreement, US Ecology will form a new holding company which will take the name of US Ecology, Inc. immediately upon the closing of the transaction and will own both US Ecology and NRCG.

US Ecology stockholders will receive 1 share of common stock of the new holding company for each share of US Ecology common stock they own upon closing of the transaction.

NRCG common stockholders will receive 0.196 shares of common stock of the new holding company for each share of NRCG common stock they own upon closing of the transaction.

The exchange ratio represents a price of $12.00 per share of NRCG stock, based on the US Ecology average share price over the last 15-trading days.

The $12.00 price per share represents a premium of approximately 36% to NRCG’s June 21 closing price of $8.83.

Each share of NRCG’s 7.00% Series A Convertible Cumulative Preferred Stock is expected to be converted in the merger into approximately 1.8 common shares of the new holding company.

NRCG’s 19.249M outstanding Warrants to purchase NRCG common stock will be converted to 3.773M Warrants to purchase common stock of the new holding company, with a strike price of $58.67 each.

The transaction will provide NRCG stockholders with continued participation in the future prospects expected to result from the combination through their ownership of approximately 30% of the stock of the new holding company, on a fully diluted basis.

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WalMart Earnings Outlook

Walmart (WMT) is scheduled to report results of its fourth quarter before the market open on Tuesday, February 19, with a conference call scheduled for 8:00 am EDT.

Wal-Mart reports next week. See Stockwinners.com for the report

What to watch for:

1. OUTLOOK: Walmart previously raised its fiscal 2019 EPS view to $4.90-$5.05 and narrowed its net sales view to up about 2%, but cut its EPS outlook at its investor meeting in October to $4.65-$4.80.

In its November earnings report, Walmart again raised its FY19 EPS outlook to $4.75-$4.85. The current Street forecast for FY19 EPS stands at $4.84 on revenue of $514.33B.

The company previously said it was moving to an annual guidance framework with its quarterly updates, and that while there may be fluctuations within the quarters, “we believe EPS growth will be relatively consistent across the year.”

Baird analyst Peter Benedict said he expects Walmart’s Q4 earnings to be solid, and expects guidance to remain intact, although he recognizes the uncertainty with Flipkart as the result of new regulations in India.

2. HOLIDAY SEASON:

Jet.com’s holiday weekend was “truly horrible,” with sales down 6% on Thanksgiving and Black Friday and a 39% plunge on Cyber Monday vs. last year, BuzzFeed News reported, citing data from market research firm Edison Trends.

According to the data, Target.com (TGT) sales increased 48% on Thanksgiving and Black Friday and 19% on Cyber Monday, Amazon (AMZN) increased by 25% on Black Friday and Thanksgiving and 17% on Cyber Monday, and Jet.com parent Walmart.com increased sales revenue by 23% on Thanksgiving and Black Friday and 32% on Cyber Monday.

In late December, Amazon said that it had a “record-breaking” holiday season with more items ordered worldwide than ever before. Amazon customers shopped at record levels from a wide selection of products across every department, it said.

3. COMPETITION:

Retailers like Walmart have been hurt by an increase in online shopping on sites like Amazon rather than at brick-and-mortar stores. Walmart is seeking to create a big ad business to rival that of Amazon, Bloomberg reported, adding that it has hired executives from NBC (CMCSA) and CBS (CBS) to help bolster its advertising business.

Walmart has also launched a private-label furniture brand, called MoDRN, which is “a direct hit to big furniture retailers” such as Wayfair (W) and Ikea and a challenge to rival Amazon, Erica Pandey wrote for Axios.

4. FLIPKART:

Bernstein analyst Brandon Fletcher said that India has been bandying about restrictive e-commerce regulations this past year, and finally pulled the trigger despite protestations from both Walmart and Amazon.

Walmart to pay about $16B for initial stake of about 77% in India's Flipkart, Stockwinners
Walmart to pay about $16B for initial stake of about 77% in India’s Flipkart, Stockwinners

The new rules put a damper on 1P selling models, pricing discounts, supplier exclusives, and supplier shares of sales above 25%, all of which are important to both companies’ planned models.

While not significant to Walmart’s total revenues, the analyst believes it does put a damper on its long-term growth potential in the market through Flipkart and raises the question of where Walmart will make up that growth.

Morgan Stanley analyst Simeon Gutman said Flipkart’s losses will likely rise due to new e-commerce regulations in India and Walmart investors “can’t ignore Flipkart” as it once again becomes a bigger part of the retailer’s investment narrative.

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Toyota enters self-driving car services

Toyota, SoftBank agree to form JV for self-driving car services

Toyota enters self-driving car services, Stockwinners
Toyota enters self-driving car services, Stockwinners

Shares of Toyota (TM) are in focus on Thursday after the company announced plans to team up with SoftBank (SFTBF) to develop self-driving car services.

The news follows an announcement from General Motors (GM) on Wednesday that Honda (HMC) will invest $2.75B and take a 5.7% stake in its Cruise self-driving vehicle unit, in which SoftBank is also an investor.

TOYOTA, SOFTBANK TO FORM JV

Toyota announced in a statement that it and SoftBank will form a joint venture called MONET, short for mobility network, to develop businesses that will use driverless-car technology to offer new services, such as mobile convenience stores and delivery vehicles in which food is prepared en route.

MONET will provide coordination between Toyota’s Mobility Services Platform, Toyota’s information infrastructure for connected vehicles, and SoftBank’s Internet of Things Platform, which was built to create new value from the collection and analysis of data acquired from smartphones and sensor devices, the companies said.

MONET will roll out an autonomous driving service using e-Palette, Toyota’s dedicated battery electric vehicle for mobility services, by the second half of the 2020s, Toyota and SoftBank added.

The venture will have initial capital of Y2B, and SoftBank will own just over half of the business, which will initially focus on Japan and eventually go global, according to a Reuters report.

Junichi Miyakawa, chief technology officer at SoftBank who will be CEO of the new company, commented that “SoftBank alone and automakers alone can’t do everything… We want to work to help people with limited access to transportation.”

WHAT’S NOTABLE

Earlier this year, Toyota set up a new company dedicated to the research and development of self-driving vehicles, with plans to invest $2.8 billion to develop a commercially viable autonomous car.

RECENT PARTNERSHIPS IN AUTONOMOUS VEHICLES

On Wednesday, Cruise and GM announced that they partnered with Honda to work towards large-scale deployment of autonomous vehicle technology.

Honda will work jointly with Cruise and General Motors to fund and develop a purpose-built autonomous vehicle for Cruise that can serve a wide variety of use cases and be manufactured at high volume for global deployment.

Honda will contribute approximately $2B over 12 years to these initiatives, which, together with a $750M equity investment in Cruise, brings its total commitment to the project to $2.75B.

SoftBank’s Vision Fund committed $2.3B to Cruise earlier this year.

Additionally, Renault (RNSDF)-Nissan (NSANY) and Daimler (DDAIF) are considering expanding their collaboration to battery and autonomous vehicle technology as well as mobility services, Reuters reported on Wednesday, citing comments made by the CEOs of both companies.

“The industry being in transformation in the area of connectivity, autonomous cars and connected services, there are plenty of areas of cooperation for our entities,” Renault Nissan CEO Carlos Ghosn said.


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Veritex, Green Bancorp to merge 

Veritex, Green Bancorp to merge 

Veritex, Green Bancorp to merge, Stockwinners
Veritex, Green Bancorp to merge, Stockwinners

Veritex Holdings (VBTX) and Green Bancorp (GNBC) jointly announced the entry into a definitive agreement pursuant to which Green and Green Bank, N.A. will merge with and into Veritex and Veritex Community Bank, respectively.

Veritex, Green Bancorp to merge, Stockwinners
Veritex, Green Bancorp to merge, Stockwinners

The transaction will create a leading Texas community bank, with 43 branches across Texas, ranking as the tenth largest Texas-based banking institution by deposit market share.

The combined franchise would have approximately $7.5B in assets, $5.6B in loans and $5.9B in deposits, based on the companies’ balance sheets as of June 30, 2018.

Under the terms of the merger agreement, upon completion of the merger, shareholders of Green will receive 0.79 shares of Veritex common stock for each share of Green common stock, valuing the transaction at approximately $1B, or $25.89 per Green share, based on the closing share price of Veritex of $32.77 on July 23, 2018.

Legacy Veritex and Green shareholders will collectively own approximately 45% and 55% of the combined company, respectively.

Upon completion of the merger, C. Malcolm Holland, current Chairman and Chief Executive Officer of Veritex, will continue to serve as Chairman and Chief Executive Officer of the combined company.

Terry Earley, current Chief Financial Officer of Green, will serve as Chief Financial Officer of the combined company, and Geoffrey Greenwade, current President of Green, will serve as the Houston President of the combined company.

The board of directors of the combined company will consist of nine members, six from Veritex’s current board of directors and three from Green’s current board of directors.

Veritex expects this acquisition to be approximately 25% accretive to earnings per common share, excluding one-time charges.

The transaction is expected to produce approximately 12.0% tangible book value per share dilution at closing with an earnback period of approximately 2.8 years.

The merger agreement has been unanimously approved by the board of directors of both Veritex and Green.

The merger agreement contains customary representations and warranties and covenants by Veritex and Green. Closing is subject to customary approvals by regulatory authorities and the shareholders of both Veritex and Green, and is expected to occur in the first quarter of 2019.


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Blue Buffalo sold for $8 billion

General Mills acquires Blue Buffalo Pet Products for $40.00 a share in cash

Blue Buffalo sold for $8 billion. Stockwinners.com
Blue Buffalo sold for $8 billion

 

General Mills (GIS) and Blue Buffalo Pet Products (BUFF) announced that they have entered into a definitive agreement under which General Mills will acquire Blue Buffalo for $40.00 per share in cash, representing an enterprise value of approximately $8B.

 

The transaction establishes General Mills as the leader in the U.S. Wholesome Natural pet food category, the fastest growing portion of the overall pet food market, and accelerates its portfolio reshaping strategy.

 

The $30 billion U.S. pet food market is generating consistent 3-4% growth and is highly attractive for retailers based on continued market growth, premiumization and subscription-like purchase patterns that drive traffic and repeat purchases.

 

Blue Buffalo is the leader in the fastest-growing Wholesome Natural category with double-digit growth over each of the last three years. The Wholesome Natural market represents approximately 10% of the pet food market in volume and approximately 20% in value.

 

Based on the strong consumer tailwinds, the Wholesome Natural market is poised to continue to grow, propelling BLUE’s growth.

 

General Mills’ scale and decades of experience will support greater effectiveness and efficiency for Blue Buffalo across key business areas, including: sales, marketing, advertising, supply chain, R&D, innovation, and environmental stewardship.

 

These capabilities are expected to contribute to meaningful revenue synergies over time, in addition to $50 million in anticipated cost savings opportunities.

The transaction will be immediately accretive to General Mills (GIS) net sales growth and operating margin profile, and is expected to be neutral to cash EPS in fiscal 2019 and accretive in fiscal 2020.


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Avon Products is encouraged to sell the company

Shareholder calls on Avon Products to consider a sale of the company

Shareholder calls on Avon Products to consider a sale. Stockwinners.com
Shareholder calls on Avon Products to consider a sale

A group of shareholders of Avon Products (AVP) led by Shah Capital, Barington Capital Group, L.P., and NuOrion Partners that collectively beneficially owns approximately 3.5% of the outstanding common stock announced that it has sent a letter to the board of Avon calling on the board to promptly retain a financial advisor to explore all strategic alternatives to maximize shareholder value, including a sale of the company in whole or in parts.

The Shareholder Group is extremely disappointed with the deteriorating operating and share price performance that has occurred under the stewardship of the current board.

The Shareholder Group is also dismayed by the Board’s failure to act quickly and decisively on the past recommendations its members have made to improve the long-term performance of the company, including promptly hiring a new chief executive officer – a step that has been long overdue and members of the Shareholder Group recommended over two years ago.

As a result, the Shareholder Group has lost confidence in the ability of Avon’s current Board to create meaningful long-term value for its public shareholders, and sees no reason why shareholders should continue to wait for a turnaround from a Board that has overseen a tremendous destruction of shareholder value.

The Shareholder Group therefore believes that the best course of action is for the Board to retain a financial advisor to explore the sale of the company.

The Shareholder Group believes that Avon would be highly attractive to a range of buyers due to its many positive attributes, including its well-known 130-year old brand; its vast product offering generating over $5.7 billion in sales; its strong market positions in developing countries such as Brazil, Russia and Mexico; its owned manufacturing operations; and its six million direct sales representatives.

In addition, a multinational acquirer would immediately benefit from its ability to improve Avon’s capital structure and the tax efficiency of its operations.

The Shareholder Group is convinced that a better capitalized strategic buyer would do a much better job of unlocking Avon’s tremendous value potential than the company’s current Board.

AVP closed at $2.43. The stock has a 52 weeks trading range of $1.85 – $6.03.


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Apple announces new U.S. investments

Apple announces new U.S. investments, sees $38B of repatriation taxes

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Apple has too much cash

Apple (AAPL) announced a new set of investments “to build on its commitment to support the American economy and its workforce,” concentrated in three areas: direct employment by Apple, spending and investment with Apple’s domestic suppliers and manufacturers, and fueling the app economy.

Apple said in a statement that it is already responsible for creating and supporting over 2M jobs across the United States.

It expects “to generate even more jobs as a result of the initiatives being announced today.”

Combining new investments and Apple’s current pace of spending with domestic suppliers and manufacturers, an estimated $55B for 2018, Apple’s direct contribution to the U.S. economy will be more than $350B over the next five years, not including Apple’s ongoing tax payments, the tax revenues generated from employees’ wages and the sale of Apple products.

Planned capital expenditures in the U.S., investments in American manufacturing over five years and a record tax payment upon repatriation of overseas profits will account for approximately $75B of Apple’s direct contribution, the iPhone maker said.

Apple anticipates repatriation tax payments of approximately $38B as required by recent changes to the tax law.

The company expects to invest over $30B in capital expenditures in the U.S. over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one. Apple already employs 84,000 people in all 50 states.

The company plans to establish an Apple campus in a new location, which will initially house technical support for customers. The location of this new facility will be announced later in the year.

Today, Apple is breaking ground on a new facility in downtown Reno, which will support its existing Nevada facilities.

AAPL is up $2.79 to $179.05.


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December international rig counts rise

Baker Hughes reports December international rig count 954

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Rig Counts Rise – See Stockwinners.com Market Radar to read more

Baker Hughes (BHGE), a GE company, announced that the Baker Hughes international rig count for December 2017 was 954, up 12 from the 942 counted in November 2017, and up 25 from the 929 counted in December 2016.

The international offshore rig count for December 2017 was 191, up 8 from the 183 counted in November 2017, and down 19 from the 210 counted in December 2016.

The average US rig count for December 2017 was 930, up 19 from the 911 counted in November 2017, and up 296 from the 634 counted in December 2016.

The average Canadian rig count for December 2017 was 205, up 1 from the 204 counted in November 2017, and down 4 from the 209 counted in December 2016.

The worldwide rig count for December 2017 was 2,089, up 32 from the 2,057 counted in November 2017, and up 317 from the 1,772 counted in December 2016.

WTI crude last traded at $61.65 per barrel, up 21 cents.  Brent crude is up 16 cents to $67.78 per barrel.


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CVS to buy Aetna for $77 billion

Aetna sold for $275 per share in cash and stocks

CVS offers $275 per share for Aetna.  

VS Health (CVS) and Aetna (AET) announced the execution of a definitive merger agreement under which CVS Health will acquire all outstanding shares of Aetna for a combination of cash and stock.

Under the terms of the merger agreement, Aetna shareholders will receive $145 per share in cash and 0.8378 CVS Health shares for each Aetna share. The transaction values Aetna at approximately $207 per share or approximately $69B. Including the assumption of Aetna’s debt, the total value of the transaction is $77B.

If approved, the mega-merger would create a giant consumer health care company with a familiar presence in thousands of communities. Aetna chief executive Mark T. Bertolini described the vision in an interview as “creating a new front door for health care in America.”

CVS would provide a broad range of health services to Aetna’s 22 million medical members at its nationwide network of pharmacies and walk-in clinics, and further decrease the drug store titan’s reliance on the retail sales that have faced increasing competition.

“You can imagine a world where health care is better designed around the people who use it, which is one of the challenges we have today,” CVS chief executive Larry J. Merlo said in an interview. As part of the deal, Bertolini would join the CVS board and Aetna would be run as a standalone business unit.

The deal is likely to set off even more mergers in the health-care industry, which has been undergoing consolidation and faces potential new competition from Amazon.

It could position Aetna to be more competitive with UnitedHealth Group, the nation’s largest insurer, which has already expanded  beyond its core business into pharmacy care services, clinics and surgery care centers and health care data.

CVS closed at $75.12. AET closed at $181.31.


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Rig counts continue to rise

Baker Hughes reports U.S. rig count up 6 to 929 rigs 

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Rig Counts Rise – See Stockwinners.com Market Radar to read more

Baker Hughes reports that the U.S. rig count is up 6 rigs from last week to 929, with oil rigs up 2 to 749, gas rigs up 4 to 180, and miscellaneous rigs unchanged.

The U.S. Rig Count is up 332 rigs from last year’s count of 597, with oil rigs up 272, gas rigs up 61, and miscellaneous rigs down 1 to 0.

The U.S. Offshore Rig Count is down 2 rigs from last week to 20 and down 2 rigs year-over-year.

The Canada Rig Count is up 7 rigs from last week to 222, with oil rigs up 4 to 111 and gas rigs up 3 to 111, and miscellaneous rigs unchanged.

The Canada Rig Count is up 22 rigs from last year’s count of 200, with oil rigs up 11, gas rigs up 13, and miscellaneous rigs down 2 to 0.

Crude oil is up 85 cents to $58.25 per barrel.  Brent crude is up $1.01 to $63.64 per barrel.


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Bazaarvoice sold for $521 million

Bazaarvoice to be acquired by Marlin Equity Partners 

Bazaarvoice (BV) announced that it has entered into a definitive agreement to be acquired by entities affiliated with the global investment firm, Marlin Equity Partners.

Under the terms of the agreement, Marlin will acquire each share of outstanding common stock of Bazaarvoice in exchange for $5.50 in cash for a total value of approximately $521M.

This price represents an 18% premium to the average closing price of Bazaarvoice common stock for the 30-calendar day period ending November 24, 2017.

Upon completion of the transaction, Bazaarvoice will become a privately-held company.

Bazaarvoice will maintain its headquarters in Austin, Texas.

The closing of the transaction is subject to customary closing conditions, including regulatory approvals and the affirmative vote by a majority of the votes cast by the holders of Bazaarvoice common stock at a to-be-scheduled special meeting of stockholders.

The transaction is expected to close in the first quarter of calendar 2018.

BV closed at $4.80.


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CBS blocks Dish Network

CBS blacks out DISH subscribers, DISH offers OTA antennas at no cost 

CBS black outs DISH Network. See Stockwinners.com for details

DISH reported that CBS Corporation (CBS) chose to black out DISH customers’ access to 28 local channels in 18 markets across 26 states.

CBS is blocking consumers in an effort to raise carriage rates for local channels and gain negotiating leverage for unrelated cable channels, all with declining viewership on DISH.

“CBS is attempting to tax DISH customers on programming that’s losing viewers, tax DISH customers on programming available for free over the air, and tax DISH customers for content available directly from CBS,” said Warren Schlichting, DISH executive vice president of Marketing, Programming and Media Sales.

“Our customers are clear: they don’t want to pay a CBS tax. It’s regrettable and unnecessary that CBS is bringing its greed into the homes of millions of families this Thanksgiving.”

On a recent investor conference call, CBS boasted about the rate increases promised to shareholders, going from $250 million in 2012 to a forecasted $2.5 billion by 2020.

Those desired increases come as DISH customers are watching less CBS, with average viewership down 20 percent over the past 3 years.

As DISH works to reach an agreement, the company is offering digital over-the-air, or OTA, antennas at no cost so that customers in affected markets can watch CBS’s local broadcast channels for free.

Eligible DISH customers have the option to completely drop their local channels from their programming package, saving $10 on their monthly bill.

In recent weeks, thousands of eligible DISH customers in CBS markets have made the switch to OTA, accessing news, popular network shows and sports from CBS and other local channels for free, over the air.

Customers with qualifying equipment, programming, and location can choose to receive local channels free over the air and save $10 per month on their bill. At no cost, DISH will install an antenna for qualifying customers in CBS markets based on the reception available at their home.

In addition to asking for significant price increases for local channels, CBS is attempting to “force bundle” unrelated and low-performing cable channels at a premium.

“CBS is using its mix of local and national channels against viewers, abusing outdated laws to try to force consumers to pay more. This greedy attempt to extort more money from our customers is one of the main reasons we – and our industry – are asking Congress to restore balance in the broadcaster-pay TV equation,” said Jeff Blum, DISH senior vice president and deputy general counsel.

“We are asking lawmakers to reform outdated TV laws to give our customers the best viewing experience at an affordable price – without the threat of broadcaster blackouts.”

Along with other pay-TV companies and public interest groups that form the American Television Alliance, DISH has called for the U.S. Congress to revamp the out-of-date laws that favor these high fees and unnecessary blackouts.

Blum continued: “We continue to urge the FCC and Congress to update a system that emboldens broadcasters to black out consumers.”


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Merit Medical goes shopping

Merit Medical to purchase Becton Dickinson assets for $100M 

Merit Medical goes shopping. See Stockwinners.com for details

Merit Medical (MMSI) has signed an asset purchase agreement with Becton, Dickinson (BDX) to acquire certain assets which BD proposes to sell in connection with its proposed acquisition of C.R. Bard.

Merit’s proposed asset acquisition is subject to the closing of BD’s proposed acquisition of Bard as well as other usual and customary closing conditions.

The assets to be acquired are soft tissue core needle biopsy products currently sold by BD under the trade names of Achieve Programmable Automatic Biopsy System, Temno Biopsy System and Tru-Cut Biopsy Needles.

Additionally, Merit proposes to acquire the Aspira Pleural Effusion Drainage Kits and the Aspira Peritoneal Drainage System currently marketed by Bard.

The purchase price for the product lines and related assets to be acquired is $100M, subject to adjustment for fluctuations in the value of transferred inventory. Merit intends to finance the acquisition at closing through borrowings which are currently available under its revolving credit facility.

After giving effect to the proposed transaction, Merit anticipates its debt to adjusted EBITDA will increase from approximately 2.20 to approximately 2.70.

This transaction is expected to be accretive to both GAAP and non-GAAP earnings in 2018. Merit’s management expects the acquisition to provide incremental annual revenues in the range of $42M-$48M, adjusted gross margins for the subject product lines in the range of 60-70%, and, over a period of six to twelve months, to be accretive by 50-120 basis points to Merit’s adjusted gross margins.

The transaction is also expected to expand operating margins and increase cash flow. Merit’s management expects the acquisition to provide 10c-19c in adjusted non-GAAP EPS accretion in FY18.


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Acorda lower on safety concerns over its tozadenant

Acorda increases blood cell count monitoring in Phase 3 tozadenant program

Acorda Therapeutics lower on safety concerns over its Parkinson drug. See Stockwinners.com for details

Acorda Therapeutics (ACOR) announced that it has increased the frequency of blood cell count monitoring for participants to weekly in its Phase 3 program of tozadenant for Parkinson’s disease.

The company took this action in response to cases of agranulocytosis, possibly drug-related, and in some cases associated with sepsis and death.

Agranulocytosis is the absence of white blood cells, which fight infection.

The company also has paused new enrollment in the long-term safety studies, pending further discussion with the independent Data Safety Monitoring Board and the United States Food and Drug Administration.

The Phase 3 program includes an ongoing pivotal efficacy and safety study and two long-term safety studies. Including the previously conducted Phase 2b study, approximately 890 patients have been exposed to tozadenant and 234 have been exposed to placebo.

This corresponds to approximately 300 patient years of tozadenant exposure and 75 patient-years of placebo.

There have been seven cases of sepsis, all in the tozadenant groups, five of which were fatal.

Four of the sepsis cases were associated with agranulocytosis, two had no white blood cell counts available at the time of the event and one had a high white blood cell count.

“We have taken these steps in the best interests of the safety of patients in the tozadenant studies, which is our top priority,” said Ron Cohen, M.D., Acorda’s President and CEO.

“Contingent on further input from the DSMB and FDA, we continue to expect to report efficacy and safety results of the double-blind Phase 3 study in the first quarter of 2018.”

ACOR closed at $28.20. It last traded at $17.40.


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Bonanza Creek sold for $746 million

SandRidge Energy to acquire Bonanza Creek for $36.00 per share in cash, stock

Bonanza Creek sold for $764M. See Stockwinners.com for details

SandRidge Energy (SD) and Bonanza Creek Energy (BCEI) jointly announced today that the two companies have entered into a definitive merger agreement under which SandRidge will acquire all of the outstanding shares of common stock of Bonanza Creek in a cash-and-stock transaction valued at $36.00 per share.

The consideration consists of $19.20 in cash and $16.80 of SandRidge shares for each Bonanza Creek share, subject to the collar mechanism described below.

Bonanza Creek Energy, Inc. engages in the exploration, development, and production of onshore oil and related liquids-rich natural gas in the United States.

Bonanza Creek shareholders will receive $36.00 per share under the terms of the agreement, comprised of $19.20 per share in cash and $16.80 per share in common shares of SandRidge stock, subject to the collar mechanism.

This represents a 17.4% premium to Bonanza Creek’s closing price as of November 14.

This purchase price implies a total transaction value of approximately $746M, comprised of $398M in cash and 18.89M shares of SandRidge stock, based on SandRidge’s stock price as of November 14.

Following the transaction, shareholders of Bonanza Creek are expected to own between approximately 31.4% and 35.8% of the outstanding shares of SandRidge based upon the Average Parent Stock Price.

One of the independent directors of Bonanza Creek will be joining the Board of Directors of SandRidge.

The stock portion will be subject to a collar based on the volume weighted average price of SandRidge common shares over the 20 business days ending on the third business day prior to closing. If the Average Parent Stock Price is greater than or equal to $17.50 but less than or equal to $21.38, Bonanza Creek shareholders will receive a number of SandRidge shares between 0.7858 and 0.9600 equal to $16.80 in value per Bonanza Creek share. Bonanza Creek shareholders will receive 0.9600 SandRidge common shares if the Average Parent Stock Price is below $17.50 and 0.7858 SandRidge common shares if the Average Parent Stock Price is above $21.38.

The Boards of Directors of both companies have unanimously approved the terms of the agreement, and have recommended that both shareholder groups approve the transaction.

The completion of the transaction is subject to the approval of each company’s shareholders, certain regulatory approvals and customary closing conditions.

The transaction is expected to close in the first quarter of 2018.

Accretive Purchase

James Bennett, SandRidge’s CEO, said “This acquisition greatly enhances our existing portfolio by adding a deep inventory of drill-ready locations in the DJ Basin of Colorado and is highly complementary to our existing North Park, Northwest STACK and Mississippian assets.

The geological and operational characteristics of Bonanza’s Niobrara and Codell locations are analogous to our existing Colorado North Park assets, and we expect to benefit from the expertise of their teams. Overall, we believe this will drive strong risk-adjusted returns in both areas. Likewise, SandRidge will benefit from the greatly increased scale and substantial cost and operational synergies as a result of the transaction. Lastly, the acquisition will be accretive to cash flow per share and will enhance our ability over time to increase cash flow generation of the business.”


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