Whirlpool confirms pact with Emerson Electric to acquire InSinkErator for $3B
Whirlpool (WHR) announced that it has entered into a definitive agreement with Emerson Electric (EMR) to acquire InSinkErator, the world’s largest manufacturer of food waste disposers and instant hot water dispensers for home and commercial use, in an all-cash transaction for $3B.
The acquisition is expected to be immediately accretive to Whirlpool Corporation’s margins, adding approximately $1.25 EPS accretion in fiscal 2023.
Whirlpool also expects to generate revenue upside by capitalizing on InSinkErator’s leading consumer brand preference, an installed base that is five times larger than the rest of the industry driving a recurring sales profile, the strong underlying secular tailwinds of the U.S. housing market, and the expansion of the InSinkErator brand into new markets and product offerings.
Whirlpool plans to initially fund the acquisition through available liquidity, with new debt put in place at a later date.
The acquisition, which has been approved by the Board of Directors of both companies, is subject to customary closing conditions, including regulatory approvals, and is expected to close in the fourth quarter. Whirlpool’s 2022 guidance remains unchanged.
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.
iRobot to be acquired by Amazon for $61/share in deal valued at $1.7B
Amazon (AMZN) and iRobot (IRBT) announced that they have entered into a definitive merger agreement under which Amazon will acquire iRobot. Amazon will acquire iRobot for $61 per share in an all-cash transaction valued at approximately $1.7B, including iRobot’s net debt.
We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” said Dave Limp, SVP of Amazon Devices.
“Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive-from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin.
Customers love iRobot products-and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.”
iRobot makes the popular Roomba
Amazon will acquire iRobot for $61 per share in an all-cash transaction valued at approximately $1.7B, including iRobot’s net debt.
Completion of the transaction is subject to customary closing conditions, including approval by iRobot’s shareholders and regulatory approvals.
On completion, Colin Angle will remain as CEO of iRobot.
In light of the transaction with Amazon.com, iRobot will not hold its Q2 financial results conference call, which was originally scheduled for August 10.
In addition, iRobot has withdrawn its prior 2022 financial expectations issued in early May, as well as its long-term financial targets provided in December 2021. Given the ongoing disruptions and uncertainty that could impact the company’s outlook, iRobot is suspending its practice of providing financial guidance.
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.
North American rail traffic dropped 17.4% in week ended January 8
The Association of American Railroads, AAR, reported U.S. rail traffic for the week ending January 8.
For this week, total U.S. weekly rail traffic was 440,761 carloads and intermodal units, down 16% compared with the same week last year.
Total carloads for the week ending January 8 were 210,020 carloads, down 10.6% compared with the same week in 2021, while U.S. weekly intermodal volume was 230,741 containers and trailers, down 20.4% compared to 2021.
For the first week of 2022, U.S. railroads reported cumulative volume of 210,020 carloads, down 10.6% from the same point last year; and 230,741 intermodal units, down 20.4% from last year.
Total combined U.S. traffic for the first week of 2022 was 440,761 carloads and intermodal units, a decrease of 16% compared to last year.
North American rail volume for the week ending January 8, on 12 reporting U.S., Canadian and Mexican railroads totaled 288,324 carloads, down 13% compared with the same week last year, and 298,984 intermodal units, down 21.2% compared with last year.
Total combined weekly rail traffic in North America was 587,308 carloads and intermodal units, down 17.4%.
North American rail volume for the first week of 2022 was 587,308 carloads and intermodal units, down 17.4% 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), Union Pacific (UNP), FreightCar America (RAIL),Trinity Industries (TRN) and Greenbrier (GBX).
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.
Fed members project Federal funds rate near zero until end 2023
There were some important shifts in the statement versus July’s, however, that further support the ZIRP posture.
Indeed, the Fed will “aim” for an inflation rate “moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.
The Fed reiterated from June that it will in coming months increase its holdings of Treasuries and MBS “to sustain smooth market functioning and help foster accommodative financial conditions.” There were two dissents. Kaplan approved of the current target range, but wanted to retain a “greater policy flexibility.” Kashkari wanted the statement to indicate the current target range on rates will be maintained until core inflation has reached 2% on a sustained basis. The Fed’s SEP reflected an improved outlook on 2020 growth, as expected.
FOMC Chief, Jerome Powell
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 inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved.
The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.”
Feds balance sheet ballons
The Fed released the economic projections of Federal Reserve Board members and Federal Reserve Bank presidents under their individual assessments of projected appropriate monetary policy, which shows that the median projection for Federal funds rate is 0.1% for the end of 2020, the end of 2021, and the end of 2022. The group’s projections in June were also for a Federal funds rate of 0.1% at the end of 2020, the end of 2021 and the end of 2022. The Fed group has extended its projection out to 2023, and still sees a Federal funds rate of 0.1% at the end of 2023.
FOMC will continue to pump money into economy
FOMC Forecast revisions, released with the FOMC statement, show the huge boosts in the official 2020 GDP forecasts that analysts had assumed, followed by a more restrained 2021-23 bounce.
The jobless rate estimates were lowered by much more than expected across the forecast horizon, and inflation was boosted as expected.
The median Fed funds rates sit at 0.1% through 2023, though the range of estimates show expectations of hikes by some starting in 2022.
The 2020 GDP central tendency was boosted sharply to the -4.0% to -3.0% from the prior central tendency of -7.6% to -5.5%, versus our own -2.4% forecast.
Unemployment expected to stay high
Analysts saw a huge trimming the jobless rate central tendency to 7.0%-8.0% from 9.0%-10.0%, versus our own higher 8.2% figure. Analysts saw boosts in the PCE chain price central tendencies to 1.1%-1.3% from 0.6%-1.0% for the headline and to 1.3%-1.5% from 0.9%-1.1% for the core, versus our respective estimates of 1.2% and 1.6%.
The central tendency for the Fed funds rate rises to 0.1%-0.4% in 2023 after unanimous 0.1% figures in 2020 and 2021. The range rises to 0.1%-0.6% in 2022, and to 0.1%-1.4% in 2023. page for a table of assumptions for the Fed’s revised forecasts.
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.
Barnes & Noble to be acquired by Elliott for $6.50 per share in all cash deal
Barnes & Noble sold for $683M, Stockwinners
Barnes & Noble (BKS) announces that it has entered into a definitive agreement to be acquired by funds advised by Elliott Advisors for $6.50 per share in an all-cash transaction valued at approximately $683M, including the assumption of debt.
Barnes & Noble has faced continued pressure from Amazon and independent booksellers. Its shares had fallen roughly 25% year to date before the news leak. Within the past five years, Barnes & Noble has lost more than $1 billion in market value.
Elliott’s acquisition of Barnes & Noble, the largest retail bookseller in the United States, follows its June 2018 acquisition of Waterstones, the largest retail bookseller in the United Kingdom.
James Daunt, CEO of Waterstones, will assume also the role of CEO of Barnes & Noble following the completion of the transaction and will be based in New York.
The $6.50 per share purchase price represents a 43% premium to the 10-day volume weighted average closing share price of Barnes & Noble’s common stock ended June 5, the day before rumors of a potential transaction were reported in the media.
As a private company, Barnes & Noble will likely be more free to make the changes and investment that can be unwieldy under a public spotlight. Part of the bookseller’s turnaround plan has included closing some of its more than 600 stores across the U.S. and relocating to smaller spaces that receive a fresh and modern look. The company has said its prototype stores encourage shoppers to buy books online or from a tablet.
The retailer has shown small signs of upturn. In March, it reported that over the holidays, sales at locations open for at least a year during the quarter rose 1.1 percent — its best quarterly performance in three years. As of January, it had $15 million in cash and cash equivalents.
The announced transaction with Elliott is the culmination of an extensive Strategic Alternative Review conducted by the Special Committee of the Barnes & Noble board, which was announced on October 3, 2018.
The board of Barnes & Noble unanimously approved the transaction and recommend the transaction to Barnes & Noble shareholders.
Leonard #Riggio, the Founder and Chairman of Barnes & Noble, has also entered into a voting agreement in support of the transaction.
The transaction is subject to customary closing conditions, including the receipt of regulatory and stockholder approval, and is expected to close in Q3.
The merger agreement provides for the acquisition to be consummated through a merger structure. However, the parties expect to amend the agreement to utilize a tender offer structure, which is expected to reduce the time to closing by a number of weeks.
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.
