Unity Buys IronSource, Shares Tumble

Unity Software, IronSource to merge in a$4.4B all-stock deal

Unity (U) and ironSource (IS) announced that they have entered into a definitive agreement under which ironSource will merge into a wholly-owned subsidiary of Unity via an all-stock deal, where each ordinary share of ironSource will be exchanged for 0.1089 shares of Unity common stock.

Once closed, current Unity stockholders will own approximately 73.5% and current ironSource shareholders will own approximately 26.5% of the combined company.

The companies’ complementary offerings create a unique end-to-end platform that allows creators to create, publish, run, monetize, and grow live games and RT3D content seamlessly.

The proposed all-stock transaction has been approved by the boards of directors of both companies, is expected to close during Unity’s fourth quarter of 2022 and is subject to customary closing conditions, and regulatory and shareholder approval.

The combined company is expected to generate a run rate of $1B in Adjusted EBITDA by the end of 2024.

Six Months Chart of Unity

Unity Cuts Guidance

Unity Software cut FY22 revenue view to $1.3B-$1.35B from $1.35B-$1.425B – FY22 consensus was for $1.47B. Cites current assessment of macro trends, product launch and competitive dynamic with the monetization business.

Unity expects second quarter financial results to be slightly higher than the top end of the guidance range provided during its first quarter earnings call.

Needham

Needham analyst Bernie McTernan downgraded ironSource (IS) to Hold from Buy after the company announced its intent to merge with Unity (U) in an all-stock transaction. The analyst notes that ironSource shares trade at a 8% discount to the implied takeout price.

McTernan adds that the companies’ complementary platform fit, plus profitability that ironSource provides, were reasons for the large premium paid and will likely prevent smaller players from making an over-the-top offer as consolidation continues to be a theme in the mobile ad-tech space.

Piper Sandler

Piper downgrades Unity to Neutral, says ironSource deal creates overhang – Piper Sandler analyst Brent Bracelin downgraded Unity (U) to Neutral from Overweight with a price target of $34, down from $55, after the company announced a deal to merge with ironSource (IS).

While stating that the pending merger “appears to be a highly strategic acquisition that not only adds material scale and product breadth to the gaming segment but could also help improve profitability,” Bracelin cut his rating based on the near-term overhang that he sees the merger creating as well as increased execution risk over the next six to nine months.

DA Davidson

DA Davidson analyst Franco Granda lowered the firm’s price target on Unity (U) to $60 from $85 and keeps a Buy rating on the shares. The company’s deal to acquire ironSource (IS) is “very attractive” due to the confluence of revenue and cost synergies, attractive valuation, and highly complementary tech stack amidst a backdrop of privacy-driven platform changes and macro pressures, though his reduced price target reflects lower broader market multiples, the analyst tells investors in a research note.

Ark Investments

Cathie Wood’s ARK Investment bought 1.02M shares of Unity on Wednesday.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Beige Book says housing is slowing amid high inflation

Fed’s Beige Book reiterated the economy expanded at a moderate pace

Fed’s Beige Book reiterated the economy expanded at a moderate pace.

But there was a big “however,” something the Fed typically does not express:

“several Districts reported grow signs of a slowdown in demand, and contacts in five Districts noted concerns over an increased risk of a recession.”

Most Districts reported moderation in consumer spending as higher food and gas prices diminished households’ discretionary income.

Federal Reserve Regions

Auto sales were sluggish with low inventories still impacting.

Leisure travel was “healthy.” Manufacturing was mixed. Non-financial services firms saw stable to slightly higher demand. Housing demand weakened.

As in the prior report, the outlook for future economic growth was mostly negative.

Employment generally continued to rise at a moderate pace and conditions were tight overall.

Jerome Powell, FOMC Chair

But there was some sign of modest improvement in labor availability.

Most Districts reported wage growth.

“Substantial” price increases were reported across all Districts, at all stages of consumption, with food, commodities, and energy (particularly fuel) cost remaining “significant.”

There was some moderation in construction materials.

Pricing power was steady, but firms in some sectors like travel and hospitality, were able to pass through sizeable increases to consumers. That is seen persisting through the year.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Rig Counts Rise to a 2-year High !

Baker Hughes reports U.S. rig count up 13 to 753 rigs

Baker Hughes reports that the U.S. rig count is up 13 from last week to 753 with oil rigs up 10 to 594, gas rigs up 3 to 157 and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is up 283 rigs from last year’s count of 470 with oil rigs up 222, gas rigs up 59 and miscellaneous rigs up 2.

The U.S. Offshore Rig Count is flat at 16, up 2 year-over-year.

The Canada Rig Count is down 2 from last week to 154, with oil rigs flat at 104, gas rigs down 2 to 50.

Rig Counts Rise to a 2-year high

The Canada Rig Count is up 28 rigs from last year’s count of 126, with oil rigs up 22, gas rigs up 6.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is up $2.20 to $106.47 per barrel. Brent crude is up $2.02 to $112.17 per barrel. Gasoline last traded at $3.82 per gallon up 5 cents on the day.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Oil Prices Soar on EIA report!

OPEC, Russia-led group agree to increase oil production

WTI prices extended earlier gains following the bullish EIA inventory report that overshadowed the boost in production announced by OPEC+.

The Energy Information Administration (EIA) is the statistical agency of the Department of Energy. It provides policy-independent data, forecasts, and analyses to promote sound policy making, efficient markets, and public understanding regarding energy, and its interaction with the economy and the environment.

Crude prices have climbed a whopping 6-handles on the day, surging to $117.27 from an overnight low of $111.20. This is the highest since March.

The market has been whipped recently, with prices climbing on news EU would sanction some Russian oil imports, only to tumble on reports OPEC+ was considering excluding Russia from production quotas which suggested increased output from Saudi and UAE to make up for the loss.

https://stockwinners.com
Rig Counts Rise – See Stockwinners.com Market Radar to read more

Then overnight there was talk that the cartel would boost production between 500 M and 700 M barrels, which saw prices dip to the lows, but only briefly.

Prices rallied and remained elevated into the $114 area, even after OPCE+ confirmed the production increase by some 50% or 648k bpd in July and August, as there were doubt the increased output can be effected.

There is also skepticism supply will be able to meet demand down the road. The market also was likely pricing in an inventory shortfall, which the EIA confirmed with crude stocks falling 5.1 M barrels, while distillates and gas stocks declining too.

WTI is up $1.43 to $116.67 per barrel. Brent is up $1.22 to $117.52 per barrel. Gasoline is up 0.126 to $4.199 per gallon. Note that dollar is weaker today which is also helping oil prices. Euro last traded at $1.08 after hitting a low of $1.06 on the day.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Biohaven sold for $11.6B

Pfizer to acquire Biohaven Pharmaceuticals for $148.50 per share

Pfizer (PFE) and Biohaven Pharmaceutical (BHVN) announced that the companies have entered into a definitive agreement under which Pfizer will acquire Biohaven, the maker of NURTEC ODT, a dual-acting migraine therapy approved for both acute treatment and episodic prevention of migraine in adults.

Pfizer buys the migraine drug

Under the terms of the agreement, Pfizer will acquire all outstanding shares of Biohaven not already owned by Pfizer for $148.50 per share in cash.

Biohaven common shareholders, including Pfizer, will also receive 0.5 of a share of New Biohaven, a new publicly traded company that will retain Biohaven’s non-CGRP development stage pipeline compounds, per Biohaven common share.

The boards of directors of both Biohaven and Pfizer have unanimously approved the transaction.

Pfizer will pay transaction consideration totaling approximately $11.6B in cash.

Pfizer will also make payments at closing to settle Biohaven’s third party debt and for the redemption of all outstanding shares of Biohaven’s redeemable preferred stock.

Pfizer shares lower after talk with President prompts rollback, Stockwinners

The $148.50 cash consideration represents a premium of approximately 33% to Biohaven’s volume weighted average selling price of $111.70 over the three months prior to the announcement of the transaction.

This agreement follows on the November 9, 2021 collaboration for the commercialization of rimegepant and zavegepant outside the United States, in connection with which Pfizer invested $350M to acquire 2.6% of Biohaven’s common stock at $173 per share.

Following the closing, New Biohaven will continue to operate under the Biohaven name.

New Biohaven will be led by Vlad Coric, MD, as Chairman and CEO, and include other members of the current management team of Biohaven.

Biohaven common shareholders will receive, for each Biohaven share, 0.5 of a share of New Biohaven distributed via a pro rata distribution of SEC-registered, publicly listed shares. At distribution, New Biohaven will be capitalized with $275M of cash.

New Biohaven will also have the right to receive tiered royalties from Pfizer on any annual net sales of rimegepant and zavegepant in the United States in excess of $5.25B.

Pfizer expects to finance the transaction with existing cash on hand. Pfizer’s acquisition of Biohaven is subject to the completion of the New Biohaven spin-off transaction and other customary closing conditions, including receipt of regulatory approvals and approval by Biohaven’s shareholders.

The companies expect the transaction to close by early 2023.

Due to the proposed transaction, Biohaven will not hold a conference call to discuss its first quarter 2022 financial results and will issue a press release and file a quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission announcing those results on May 10, the companies noted.

BHVN is up $58.08 to $141.22.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Silicon Motion sold for $8B

MaxLinear to acquire Silicon Motion for $114.34 per share consideration

MaxLinear (MXL) and Silicon Motion (SIMO) announced that they have entered into a definitive agreement under which MaxLinear will acquire Silicon Motion in a cash and stock transaction that values the combined company at $8B in enterprise value.

Combined revenues are expected to be more than $2B annually and are supported by the technology breadth to address a total market opportunity of roughly $15B.

The transaction is expected to generate annual run-rate synergies of at least $100M to be realized within 18 months after the transaction closes and is expected to be immediately and materially accretive to MaxLinear’s non-GAAP earnings per share and cash flow.

Under the terms of the definitive agreement, the transaction consideration will consist of $93.54 in cash and 0.388 shares of MaxLinear stock for each Silicon Motion ADS and $23.385 in cash and 0.097 shares of MaxLinear common stock for each Silicon Motion ordinary share not represented by an ADS.

Upon closing of the transaction, MaxLinear shareholders will own approximately 86% of the combined company and Silicon Motion stockholders will own approximately 14% of the combined company.

Based on the closing price of MaxLinear shares on May 4, the implied value of the total transaction consideration for Silicon Motion is $3.8B. MaxLinear intends to fund the $3.1B of cash consideration with cash on hand from the combined companies and fully committed debt financing from Wells Fargo Bank, N.A.

The transaction is not subject to any financing conditions and is expected to close by the first half of calendar 2023, pending satisfaction of customary closing conditions, including Silicon Motion shareholders’ approval and regulatory approvals in various jurisdictions.

Silicon Motion Technology Corporation designs, develops, and markets NAND flash controllers for solid-state storage devices. It offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications.

SIMO last traded $96.52. MXL last traded at $44.26.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

FOMC Raises Rates

Fed boosts rates 50 basis points, says ongoing raises ‘appropriate’ 

The Federal Reserve said in today’s statement, “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent and anticipates that ongoing increases in the target range will be appropriate.”

Federal Reserve to reduce Treasury, debt holdings on June 1 – The Federal Reserve said in today’s statement, “The Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in conjunction with this statement.”

Fed says inflation remains elevated, Ukraine impacts ‘highly uncertain’ – The Federal Reserve said in today’s statement, “Although overall economic activity edged down in the first quarter, household spending and business fixed investment remained strong. Job gains have been robust in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.

The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain. The invasion and related events are creating additional upward pressure on inflation and are likely to weigh on economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks.”

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Drill, Baby, Drill,

Baker Hughes reports U.S. rig count up 3 to 698 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 3 from last week to 698 with oil rigs up 3 to 552, gas rigs unchanged at 144 and miscellaneous rigs unchanged at 2.

The international offshore rig count for April 2018 was 194. Stockwinners

The U.S. Rig Count is up 258 rigs from last year’s count of 440 with oil rigs up 210, gas rigs up 48 and miscellaneous rigs unchanged at 2.

The U.S. Offshore Rig Count is up 1 to 14, up 1 year-over-year.

The Canada Rig Count is down 6 from last week to 95, with oil rigs down 3 to 45, gas rigs down 3 to 50.

The Canada Rig Count is up 44 rigs from last year’s count of 51, with oil rigs up 25, gas rigs up 19.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is up $1.10 to $106.39 per barrel. Brent crude is up $1.42 to $108.72 per barrel. Gasoline last traded at $3.474 per gallon flat on the day.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Musk Buys Twitter for $44B

Elon Musk to acquire Twitter for $54.20 per share in cash

Twitter (TWTR) announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Tesla (TSLA) founder Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44B.

Twitter is taken private by Elon Musk

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

Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction.

Elon Musk

The purchase price represents a 38% premium to Twitter’s closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter.

Bret Taylor, Twitter’s Independent Board Chair, said, “The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” said Mr. Musk.

“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”

The transaction, which has been unanimously approved by the Twitter board of directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.

Musk has secured $25.5B of fully committed debt and margin loan financing and is providing an approximately $21B equity commitment.

There are no financing conditions to the closing of the transaction.

TWTR last traded at $51.63.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Rail Traffic Declined Last Week!

North American rail traffic fell 7.5% for the week ending April 16

The Association of American Railroads, AAR, reported U.S. rail traffic for the week ending April 16.

For this week, total U.S. weekly rail traffic was 489,801 carloads and intermodal units, down 8.1% compared with the same week last year.

Total carloads for the week ending April 16 were 221,228 carloads, down 6.8% compared with the same week in 2021, while U.S. weekly intermodal volume was 268,573 containers and trailers, down 9.2% compared to 2021. North American rail volume for the week ending April 16 on 12 reporting U.S., Canadian and Mexican railroads totaled 319,064 carloads, down 6.8% compared with the same week last year, and 354,060 intermodal units, down 8.1% compared with last year.

Total combined weekly rail traffic in North America was 673,124 carloads and intermodal units, down 7.5%.

North American rail volume for the first 15 weeks of 2022 was 9,987,458 carloads and intermodal units, down 3.9% compared with 2021.

Publicly traded companies in the space include CSX (CSX), Canadian National (CNI), Canadian Pacific (CP), Kansas City Southern (KSU), Norfolk Southern (NSC), Trinity Industries (TRN), Greenbrier (GBX), Wabtec (WAB), FreightCar America (RAIL), Union Pacific (UNP) and GATX (GATX).

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

American Campus sold for $12.8B

American Campus to be acquired by Blackstone for $65.47 per share in cash

American Campus Communities (ACC) announced that it has entered into a definitive agreement under which Blackstone (BX) Core+ perpetual capital vehicles, primarily comprised of Blackstone Real Estate Income Trust, alongside Blackstone Property Partners, will acquire all outstanding shares of common stock of ACC for $65.47 per fully diluted share in an all-cash transaction valued at approximately $12.8B, including the assumption of debt.

American Campus Communities, Inc. is the largest owner, manager and developer of high-quality student housing communities in the United States. The company is a fully integrated, self-managed and self-administered equity real estate investment trust (REIT) with expertise in the design, finance, development, construction management and operational management of student housing properties.

The purchase price represents a premium of 22% to the 90-calendar day volume-weighted average share price ending April 18, a premium of 30% over the closing stock price of February 16, the date immediately prior to the company disclosing receipt of an indication of willingness to offer to acquire the company, and a 14% premium to yesterday’s closing price.

The transaction has been unanimously approved by ACC’s board of directors and the independent Special Committee of ACC’s board and is expected to close in the third quarter of 2022, subject to approval by ACC’s shareholders and other customary closing conditions.

As a condition to the transaction, ACC has agreed to suspend payment of its quarterly dividend, effective immediately.

ACC shares are up $7.25 to $64.83.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Hasbro questioned by shareholder!

Alta Fox urges Hasbro to address questions on Q1 earnings call

Alta Fox Capital Management, the beneficial owner of approximately 2.5% of the outstanding shares of Hasbro (HAS), urged the Company to address the following questions when it reports Q1 financial results tomorrow:

“Why has the Company pushed back the record date for the 2022 Annual Meeting of Shareholders?

Given that the Board of Directors appears to be more focused on entrenchment than value creation, we are forced to question the motivation behind moving the record date to May 9th.

We fear the Board is hoping that the delay will provide time to court friendly shareholders, who are likely to support the incumbents.

In our view, this seemingly self-serving maneuver has parallels to the defensive PIPE transactions recently initiated by other underperforming companies facing election contests.

Why is the Company forcing a costly election contest instead of accepting a modest Board refresh and a capital allocation review committee in response to shareholders’ concerns regarding Hasbro’s chronic underperformance?

In our view, investors have reason to question whether the Board is acting in shareholders’ best interest or engaging in further entrenchment to maintain the Hassenfeld family’s influence.

Why did the Company expand its Board to 13 members instead of carrying out a viable director refresh?

We contend the decision to expand the Board from 11 members to 13 members following our nomination reflects an unacceptable level of dysfunction and entrenchment in the boardroom.

Why did the Company feel it was appropriate for Cynthia W. Williams, the newly appointed President of Wizards of the Coast, to join another public company’s board within two months of being appointed to her new role?

We question why Williams would want to join the board of Aterian, a company whose stock is down almost 70% from its IPO in 2019 and which has been accused of serious wrongdoings.

We find it surprising that Hasbro’s Board allowed Ms. Williams to dilute her attention so early in her tenure at Wizards of the Coast and was comfortable associating Hasbro’s senior leadership with Aterian.

Cynthia W. Williams

How did the Board determine so quickly that a spin-off of Wizards of the Coast was ill-advised, and why will it not share this analysis with shareholders?

We believe spinning off Wizards of the Coast could help enhance Hasbro’s corporate structure and unlock the full value of the division, which has a completely different growth, margin and valuation profile than the Consumer Products and Entertainment segments.

In light of the Board’s apparent credibility issues, we find it hard to believe the Company comprehensively and objectively evaluated strategic alternatives for the unit.

We believe shareholders deserve a detailed explanation of the Board’s purported evaluation, and that the analysis should be re-examined with shareholder-appointed directors focused on creating shareholder value rather than preserving the Hassenfeld family legacy.

To date, the Company has provided little evidence of business unit “synergies” that could not be accomplished through a partnership arrangement.

Why is the Board resistant to forming a capital allocation committee when investments, such as the Entertainment One deal, have been value destructive?

It is confounding to us that Hasbro continues to assume no accountability for poor capital allocation when organic and inorganic investments have failed to produce meaningful shareholder value over many years.”

Alta Fox has filed a preliminary proxy statement with the U.S. Securities and Exchange Commission in connection with its nomination of five candidates for election to the Company’s Board at this year’s Annual Meeting.

Hasbro reports on April 19th before the market open. HAS is down 2% to $83.47.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Epic Games receives $2B cash infusion

Sony, Lego holding group invest $2B in Epic Games

“Fortnite” maker Epic Games announced a $2B round of funding to advance the company’s vision to build the metaverse and support its continued growth.

This round includes investments from existing investor Sony Group Corporation (SONY) as well as KIRKBI, the family-owned holding and investment company behind The LEGO Group, with each party investing $1B respectively.

Epic continues to have only a single class of common stock outstanding and remains controlled by its CEO and founder, Tim Sweeney.

“As a creative entertainment company, we are thrilled to invest in Epic to deepen our relationship in the metaverse field, a space where creators and users share their time.” said Kenichiro Yoshida, Chairman, President and CEO, Sony Group Corporation.

Tim Sweeney, Epic’s CEO and Founder

“We are also confident that Epic’s expertise, including their powerful game engine, combined with Sony’s technologies, will accelerate our various efforts such as the development of new digital fan experiences in sports and our virtual production initiatives.”

Epic’s post-money equity valuation is $31.5B.

The closing of the investment is subject to customary closing conditions, including regulatory approvals. Other investors in Epic Games include Tencent (TCEHY), KKR (KKR), and Disney (DIS).

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Crane to split into two companies!

Crane plans to split into two independent public companies

Crane (CR) announced that its Board of Directors has unanimously approved a plan to pursue a separation into two independent, publicly-traded companies to optimize investment and capital allocation, accelerate growth, and unlock shareholder value.

Upon completion, Crane Co.’s shareholders will benefit from ownership in two focused and simplified businesses that are both leaders in their respective industries and well-positioned for continued success:

Crane Co. will be a leading global provider of mission-critical, highly engineered products and solutions, with differentiated technology, respected brands, and leadership positions in its markets.

After the separation, Crane Co. will include the Aerospace & Electronics and Process Flow Technologies businesses.

This year, these businesses are expected to generate approximately $1.9B in annual sales with a pre-corporate Adjusted EBITDA margin of approximately 18.5%.

The company will be well-positioned to accelerate organic growth in its large and attractive end markets, benefit from favorable secular trends, and apply its proven processes to drive growth through new product development and commercial excellence.

Richard Teller Crane, Founder of Crane Co.

Crane Co. is expected to have a strong, well-capitalized balance sheet underpinning a capital deployment strategy focused on supporting the company’s organic and inorganic strategic growth objectives, while providing a dividend in-line with peers.

Crane Co. will be led by Max Mitchell, who will continue to serve as President and Chief Executive Officer, with Rich Maue continuing to serve as Chief Financial Officer.

The company intends to continue to be listed on the NYSE under its current ticker symbol, “CR”.

Crane NXT will be a premier Industrial Technology business with substantial global scale, a best-in-class margin profile, and strong free cash flow generation.

This year, the Payment and Merchandising Technologies business that will become Crane NXT is expected to achieve approximately $1.4 billion in sales with a pre-corporate Adjusted EBITDA margin of approximately 28%.

In addition to its market leading brands, Crane NXT will differentiate itself through its technology leadership, positioning it to leverage long-term secular drivers including automation, security and productivity, across several high-growth adjacent markets.

After the separation, Crane NXT will be positioned to drive earnings growth through continued investment in the business and value-enhancing bolt-on acquisitions. Its balance sheet and strong free cash flow will also allow it to support a robust and differentiated level of capital return to shareholders that is expected to include a competitive dividend.

Crane NXT’s shares are expected to be listed on the NYSE under the ticker symbol “CXT”. A process is currently underway to identify Crane NXT’s chief executive, including evaluation of both internal and external candidates.

The executives currently leading Crane’s PMT business will continue to serve in senior positions with Crane NXT.

The separation is expected to occur through a tax-free distribution of the Aerospace & Electronics and Process Flow Technologies businesses to the Company’s shareholders.

Payment & Merchandising Technologies will be renamed Crane NXT concurrent with the separation, and the Aerospace & Electronics and Process Flow Technologies businesses will retain the Crane Co. name.

Upon completion of the separation, shareholders will own 100% of the equity in both of the publicly traded companies.

The separation is expected to be completed within approximately 12 months of this announcement, subject to the satisfaction of customary conditions and final approval of the separation by Crane Co.’s Board of Directors. Shareholder approval is not required.

Crane Co. will maintain its current capital deployment policies until the separation is completed.

CR is up $2.50 to $112.63.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Nielsen sold for $16 billion

Brookfield Business Partners enters partnership to acquire Nielsen in $16B deal

Brookfield Business Partners (BBU) announced it has entered into a partnership to acquire Nielsen Holdings plc (NLSN) in an all-cash transaction valued at approximately $16B.

Nielsen Holdings operates as a measurement and data analytics company worldwide. The company provides viewership and listening data, and analytics principally to media publishers and marketers, and advertising agencies for television, computer, mobile, CTV, digital, and listening platforms. 

The companies said, investment highlights include, “Market-leading position. Nielsen is a global leader in audience measurement and a trusted partner to its customers across the entire media ecosystem.

The Company has more than 50 years of statistically significant historical data and its scale is unmatched by competitors.

Nielsen’s measurement data underpins the $100+ billion video and audio advertising markets and its measurement data is the established industry standard by which video and audio advertising spend transacts. Resilient performance and outlook.

The Company’s history of consistent growth is driven by its valued offering and longstanding customer relationships.

Nielsen’s scale and existing market position should support the Company’s ability to consistently grow its measurement business.

Value creation potential. Nielsen is well positioned to be the leader in cross-media measurement as audience viewership behavior continues to evolve.

The development and adoption of Nielsen ONE, Nielsen’s cross-media measurement service, will deliver a unified measure of consumer viewership across all media and support the Company’s growth strategy.”

Brookfield will invest approximately $2.65B by way of preferred equity, convertible into 45% of Nielsen’s common equity. Brookfield will be actively involved in the Company’s governance.

Brookfield Business Partners expects to invest approximately $600M, and the balance of Brookfield’s investment will be funded from institutional partners.

Prior to or following closing, a portion of Brookfield Business Partners’ commitment may be syndicated to other institutional investors.

The transaction is subject to customary closing conditions and is expected to close in the second half of 2022.

NLSN is up $4.58 to $26.81.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Translate »