Epam Systems withdraws Q1, FY22 guidance due to events in Ukraine
EPAM Systems (EPAM) announced it is withdrawing its first quarter and 2022 financial outlook due to heightened uncertainties and regional impacts resulting from military actions in Ukraine.
EPAM Systems, Inc. provides digital platform engineering and software development services in North America, Europe, Russia, Belarus, Kazakhstan, Ukraine, Georgia, East Asia, Southeast Asia, and Australia.
“EPAM’s highest priority is the safety and security of its employees and their families in Ukraine. The company is proactively working to relocate its employees to lower risk locations in Ukraine and neighboring countries.
The company is executing business continuity plans and accelerating hiring across multiple locations in Central and Eastern Europe, Latin America, and India.
EPAM continues to operate productively in more than 40 countries and is committed to providing consistent high-quality delivery in all our geographies around the world,” the company said.
Shares of the Newton Pennsylvania company are down 46% to $207.75. Stock has a 52-week trading range of $198.25 to $725.40. Today’s loss took the shares back to 2020 levels, wiping out two years of gains.
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.
The private equity firm will pay $11 a share for MoneyGram
Madison Dearborn Partners agreed to buy the company.
MoneyGram International, Inc. provides cross-border peer-to-peer payments and money transfer services in the United States and internationally. The company operates through two segments, Global Funds Transfer and Financial Paper Products.
MoneyGram (MGI) has been a takeover target for years, as more people turn to online payments and away from old-school money-transfer services.
Chinese financial-services conglomerate Ant Group Co. agreed to buy MoneyGram in 2017, but walked away after pushback from regulators.
The acquisition by Madison Dearborn will enable MoneyGram “to accelerate the advancement of our digital growth strategy,” Chief Executive Officer Alex Holmes, who will continue to lead the firm after the deal is completed, said in the statement. “We will have greater opportunities to innovate and transform MoneyGram to lead the industry in cross-border payment technology and deliver a more expansive set of digital offerings.”
Remittances to most regions increased last year, aided by the economic recovery in the U.S. and Europe. Flows jumped almost 22% in Latin America and the Caribbean last year, 9.7% in the Middle East and North Africa, and 8% in South Asia, the World Bank said in November.
The MoneyGram acquisition, which includes a 30-day “go shop” period, is expected to be completed in the fourth quarter. Debt financing for the deal is being provided by Goldman Sachs Group Inc., Deutsche Bank AG and Barclays Plc.
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.
Republic Services to acquire US Ecology for $48.00 per share in cash
Republic Services (RSG) and US Ecology (ECOL) have entered into a definitive agreement under which Republic Services will acquire all outstanding shares of US Ecology for $48 per share in cash, representing a total value of approximately $2.2B including net debt of approximately $0.7B.
US Ecology, Inc. provides environmental services to commercial and government entities in the United States, Canada, Europe, the Middle East, Africa, Mexico, internationally. It operates through three segments: Waste Solutions, Field Services, and Energy Waste. It offers specialty waste management services, including treatment, disposal, beneficial re-use, and recycling of hazardous, non-hazardous, and other specialty waste at company-owned treatment, storage, and disposal facilities, as well as wastewater treatment services.
Republic Services, Inc. provides non-hazardous solid waste collection, transfer, disposal, recycling, and environmental services in the United States.
The transaction is not subject to a financing condition.
Republic Services intends to finance the transaction using existing and new sources of debt.
Following completion of the transaction, Republic Services expects to maintain a strong balance sheet and solid investment-grade credit rating.
The company plans net debt-to-EBITDA, as defined in our credit agreement, to return back below 3x within 18 months of closing the transaction.
The transaction was unanimously approved by the boards of directors of both companies and is expected to close by the end of the second quarter, subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by holders of a majority of the outstanding shares of US Ecology’s common stock.
ECOL is up $19.28 to $47.48. RSG is up 24 cents to $127.19.
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.
Frontier, Spirit to combine in deal that implies $25.83 per Spirit share
Spirit Airlines (SAVE) and Frontier Group Holdings (ULCC) announced a definitive merger agreement under which the companies will combine, creating America’s most competitive ultra-low fare airline.
Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, Spirit equity holders will receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own.
This implies a value of $25.83 per Spirit share at Frontier’s closing stock price of $12.39 on February 4, 2022, representing a premium of 19% over the February 4, 2022, closing price of Spirit, and a 26% premium based on the 30 trading-day volume-weighted average prices of Frontier and Spirit.
The transaction values Spirit at a fully diluted equity value of $2.9B, and a transaction value of $6.6B when accounting for the assumption of net debt and operating lease liabilities.
Upon closing of the transaction, existing Frontier equity holders will own approximately 51.5% and existing Spirit equity holders will own approximately 48.5% of the combined airline, on a fully diluted basis, providing both Frontier and Spirit equity holders with substantial upside potential.
Spirit Route Map
The Board of Directors for the new airline will be comprised of 12 directors (including the CEO), seven of whom will be named by Frontier and five of whom will be named by Spirit.
Bill Franke, CEO of the Indigo Partners, will be Chairman of the Board of the combined company.
Frontier Route Map
The merger is expected to close in the second half of 2022, subject to satisfaction of customary closing conditions, including completion of the regulatory review process and approval by Spirit stockholders.
Frontier’s controlling stockholder has approved the transaction and related issuance of shares of Frontier common stock upon signing of the merger agreement.
The combined company’s management team, branding and headquarters will be determined by a committee led by Franke prior to close.
“Our fourth quarter 2021 results came in better-than-expected, despite the negative impact from Omicron-related flight disruptions, primarily due to very strong demand over the peak December holiday period. I want to thank the entire Spirit team for their professionalism and commitment to providing excellent service to our Guests,” said Ted Christie, Spirit’s president and CEO.
Ted Christie, Spirit’s president and CEO
Spirit Airlines is up 15.9%, or $3.46 to $25.20. Frontier Group is up 14 cents to $12.81.
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.
“The Kohl’s Board of Directors (the Board) has determined, following a review with its independent financial advisors and upon the recommendation of its Finance Committee, that the valuations indicated in the current expressions of interest which it has received do not adequately reflect the Company’s value in light of its future growth and cash flow generation.
The Board is committed to maximizing the long-term value of the Company and will review and pursue opportunities that it believes would credibly lead to value consistent with its performance and future opportunities.
The Board has designated its Finance Committee to lead the ongoing review of any expressions of interest. The Finance Committee, which was formed pursuant to the 2021 settlement agreement with Macellum Advisors GP, LLC and other shareholders, is comprised exclusively of independent directors.
The Company and the Board have also engaged financial advisors, including Goldman Sachs and PJT Partners, and have asked Goldman Sachs to engage with interested parties. The Board will continue to pursue all reasonable opportunities to drive value, consistent with its fiduciary obligations. The Company looks forward to updating shareholders on its ongoing strategic initiatives and capital allocation plans at Kohl’s Investor Day on March 7, 2022.”
Shareholders Disappointed:
Macellum Advisors GP, a long-term holder of nearly 5% of the outstanding common shares of Kohl’s Corporation, issued the below statement in response to the company’s announcement that its Board of Directors has rejected recent indications of interest and adopted a two-tiered shareholder rights plan that seems particularly punitive to any investor that may seek more active engagement with the Board. Jonathan Duskin, Macellum’s Managing Partner, commented:
“We are disappointed and shocked by Kohl’s hasty rejection of confirmed indications of interest.
This morning’s rejections – which come just two weeks after outreach from potential acquirers – only validates for us that a majority of the Board is entrenched and lacks objectivity when it comes to evaluating value-maximizing sale opportunities relative to management’s historically ineffective standalone plans. We doubt that interested parties were given adequate consideration or access to management, data rooms and the type of information required to inform upward adjustments to bids.
Moreover, it appears that the Board has not authorized its bankers to canvass the market and initiate substantive conversations with other logical suiters. Even if some of our fellow shareholders want the Board to compare sale opportunities to management’s go-forward strategy, we fear the Company’s actions and statements demonstrate a lack of impartiality and strategic thinking in the boardroom.”
Duskin added: “We will do everything in our power to prevent the current Board from continuing to chill a normal-course sales process. In our view, the Board’s cumbersome Friday morning press release and adoption of a poison pill that has a lower trigger for investors that may seek more active engagement with the Company demonstrate shareholders’ interests are not the top priority in the boardroom.
It seems to us that the Board is taking unprecedented steps to derail a credible process and kill interest among the growing crop of possible buyers of Kohl’s. Fortunately, the slate we plan to nominate in the coming days will be far more aligned, experienced and openminded when it comes to pursuing all paths to maximizing value.”
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.
Citrix to be acquired by Vista, Evergreen in $16.5B all-cash transaction
Citrix (CTXS) announced that it has entered into a definitive agreement under which affiliates of Vista Equity Partners, a global investment firm focused exclusively on enterprise software, data and technology-enabled businesses, and Evergreen, an affiliate of Elliott, will acquire Citrix in an all-cash transaction valued at $16.5B, including the assumption of Citrix debt.
Under the terms of the agreement, Citrix shareholders will receive $104.00 in cash per share.
The per share purchase price represents a premium of 30% over the company’s unaffected 5-day VWAP as of December 7, 2021, the last trading day before market speculation regarding a potential transaction, and a premium of 24% over the closing price on December 20, 2021, the last trading day prior to media reports regarding a potential bid from Vista and Evergreen.
In connection with the transaction, Vista and Evergreen intend to combine Citrix and Tibco Software, one of Vista’s portfolio companies.
Citrix makes software that workers use to log onto to their corporate programs virtually, a category of product extensively relied upon during the pandemic as businesses sought quick ways to keep remote workforces connected to central operations. Many are now planning permanent hybrid setups for home and office working, which is expected to grow the market for tools that help make this seamless.
As part of the transaction, Vista and Evergreen plan to combine Citrix with Tibco Software, an enterprise data management firm that’s one of Vista’s portfolio companies. The combination will create one of the world’s largest software providers, serving 400,000 customers, according to the statement.
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.
A group led by Acacia Research (ACTG), which is controlled by activist investor Starboard Value, offered to buy Kohl’s (KSS) for $64 per share in cash, a 37% premium to Friday’s closing price of $46.84 and an offer that values the department store operator at roughly $9B. There are no guarantees that the group will ultimately line up all the funding needed and make a firm offer, but the bidders told the company they have assurances from bankers about being able to get financing for the bid, sources added.
Kohl’s (KSS) is fielding takeover offers from at least two suitors, CNBC’s Lauren Thomas and Leslie Picker reports. Sycamore is willing to pay at least $65 per share for Kohl’s, people familiar with the matter tell CNBC.
The offer from Sycamore came two days after Acacia Research (ACTG), which is backed by activist investment firm Starboard Value, offered to pay $64 a share for Kohl’s, sources said. According to the sources, Acacia and Starboard would likely partner with Oak Street Real Estate Capital to try and sell off Kohl’s real estate to raise more money.
Kohl’s confirmed that it has received letters expressing interest in acquiring the company. The Kohl’s board of directors will determine the course of action that it believes is in the best interests of the company and its shareholders. Shareholders are not required to take any action at this time. Kohl’s does not intend to further comment publicly on these matters unless it determines it is in the best interests of shareholders to do so.
Cowen
Cowen analyst Oliver Chen raised the firm’s price target on Kohl’s to $75 from $73 and keeps an Outperform rating on the shares. The analyst said the potential bid implying 3.7x TTM EV/EBITDA appears very modest based on his leveraged buyout returns analysis. He said a transaction would likely require monetization of $3bn+ of real estate via a sale leaseback. He believes other strategic/financial bidders are possible.
Citi
Citi analyst Paul Lejuez keeps a Buy rating on Kohl’s with a $73 price target following reports that Starboard Partners and Acacia Capital made an unsolicited bid for the retailer at $64 per share. The analyst believes Kohl’s management is using appropriate strategies to drive value and that the Sephora partnership “is a game-changer.” However, he also believes Kohl’s is a “mispriced asset.” The company is a strong free cash flow generator, and it doesn’t seem to be getting credit by the market, “making it reasonable to consider offers,” says Lejuez.
Credit Suisse
Credit Suisse analyst Michael Binetti notes media reported that Starboard-backed activist Acacia (ACTG) has made a bid of $64/share for Kohl’s (KSS), and that other suitors are contacting Kohl’s as well. The focus seems aligned with another activist pushing Kohl’s to act more urgently to turnaround retail ops, but more importantly to significantly bolster shareholder cash returns via more aggressively exploring potential monetization of real estate assets, the analyst notes.
Binetti believes that the key question is whether Kohl’s will see a bidding war that could result in the stock running above the current activist’s bid at $64/share. Per conversations with real estate contacts, Kohl’s could certainly fetch higher valuations for its stores, the analyst contends. Activist plans typically focus on strategies like pulling forward monetization of real estate today, and Binetti does think there’s some merit to Kohl’s embracing a slightly more aggressive real estate strategy to bolster shareholder returns today. He has a Neutral rating and a price target of $70 on the shares.
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.
Baker Hughes reports U.S. rig count up 13 to 601 rigs
Baker Hughes (BKR) reports that the U.S. rig count is up 13 from last week to 601 with oil rigs up 11 to 492, gas up 2 to 109, and miscellaneous rigs unchanged at 0.
Rig Counts Rise – See Stockwinners.com Market Radar to read more
The U.S. Rig Count is up 228 rigs from last year’s count of 373, with oil rigs up 205 gas rigs up 24 and miscellaneous rigs down 1.
The U.S. Offshore Rig Count is up 2 to 18, up 2 year-over-year.
The U.S. offshore rig count is up 2.
The Canada Rig Count is up 50 from last week to 191, with oil rigs up 43 to 121, gas rigs up 7 to 70.
Canada Rig Count is up 30 rigs from last year’s count of 161, with oil rigs up 31, gas rigs down 1.
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 $1.80 to $83.92 per barrel. Brent crude is up $1.71 to $86.22 per barrel. Gasoline last traded at $2.421 per gallon up 3.7 cents on the day. Get ready to pay more at the pump.
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.
U.S. flash Markit Purchasing Managers Index’s (PMI) all slipped in December as activity eased amid well known headwinds such as capacity constraints and Omicron variant spread.
Flash Manufacturing PMI is an estimate of manufacturing for a country, based on about 85% to 90% of total Purchasing Managers’ Index (PMI) survey responses each month.
Any reading of the Flash Manufacturing PMI above 50 indicates improving conditions, while readings below 50 indicate a deteriorating economic climate.
The manufacturing index fell another -0.5 ticks to 57.8 in December after dipping -0.1 ticks to 58.3 in November. It is the weakest since the 57.1 last December.
The index has been sliding from the record high of 63.4 in July, but it remains in expansion for an 18th straight month.
New orders declined to 56.3 from 56.9, while supplier delivers increased to their best reading since May.
The preliminary services index also fell -0.5 ticks to 57.5 on the month following the -0.7 point decline to 58.0. The reading is above the 54.8 from a year ago, however, and has been above 50 since July 2020.
The business expectations component improved to its highest reading since November 2020.
Input prices climbed to 77.4 versus 75.7 last month and is at an all-time peak (data goes back to 2009).
The composite reading dipped -0.3 ticks to 56.9 from November’s 57.2 and was at 55.3 last December. Input prices increased to a new record level at 78.1 from November’s 77.6.
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.
Hard Rock International to buy The Mirage Hotel & Casino from MGM
MGM Resorts International (MGM) announced an agreement with Hard Rock International to sell the operations of The Mirage Hotel & Casino (“The Mirage”). The deal, which is valued at $1.075 billion in cash. The deal is likely to be completed in the second half of 2022, subject to regulatory approvals.
The Mirage, which was opened in 1989, was acquired by MGM Resorts in 2000. Per the agreement, MGM Resorts will retain “The Mirage name and brand, licensing it to Hard Rock royalty-free for a maximum period of three years while it finalizes its plans to rebrand the property.”
MGM Resorts anticipates net cash proceeds following taxes and estimated fees to be nearly $815 million.
Goldman Sachs
Goldman Sachs analyst Stephen Grambling notes that MGM Resorts (MGM) announced it has entered into an agreement to sell the operations of The Mirage to Hard Rock International for $1.075B in cash and $815M after taxes and estimated fees.
Concurrently, VICI Properties (VICI) announced that in connection with the deal, they have agreed to enter into a new separate lease with Hard Rock related to the operations of the Mirage with similar terms as the current MGM Master Lease, Grambling adds, highlighting that VICI has entered into an agreement to purchase MGP, of which MGM is a controlling shareholder.
The analyst believes the deal could be a strategic positive to MGM given the potential to drive deleveraging for the enterprise. He also notes the property had seen improving margins but decelerating growth pre-pandemic, and may require substantial capex to be reinvigorated. The deal therefore would allow MGM to focus on capital allocation elsewhere, the analyst argues. Grambling has a Neutral rating on MGM Resorts with a price target of $49.
CBRE
CBRE analyst John DeCree called this a “record multiple” as well as a “winner, winner, chicken dinner deal for all parties involved, plus some bystanders,” such as Wynn (WYNN) and Caesars (CZR), who have significant Las Vegas exposure.
Mirage sets a new bar for Las Vegas operating company valuation, which makes DeCree tell investors that he “can’t help but get excited about the prospects” for Caesars, which is planning to sell one of its Vegas resorts in early 2022, and Wynn, which “is sitting on what is arguably the most valuable casino resort in Las Vegas, if not the country,” according to the analyst. DeCree has Buy ratings on MGM, Caesars and Wynn shares.
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.
GE announced its plan to form three industry-leading, global public companies focused on the growth sectors of aviation, healthcare, and energy, by: Pursuing a tax-free spin-off of GE Healthcare, creating a pure-play company at the center of precision health in early 2023, in which GE expects to retain a stake of 19.9 percent; and Combining GE Renewable Energy, GE Power, and GE Digital into one business, positioned to lead the energy transition, and then pursuing a tax-free spin-off of this business in early 2024.
GE to split into three
Following these transactions, GE will be an aviation-focused company shaping the future of flight.
As independently run companies, the businesses will be better positioned to deliver long-term growth and create value for customers, investors, and employees, with each benefitting from: Deeper operational focus, accountability, and agility to meet customer needs; Tailored capital allocation decisions in line with distinct strategies and industry-specific dynamics; Strategic and financial flexibility to pursue growth opportunities; Dedicated boards of directors with deep domain expertise; Business- and industry-oriented career opportunities and incentives for employees; and Distinct and compelling investment profiles appealing to broader, deeper investor bases.
GE Chairman and CEO H. Lawrence Culp, Jr. said, “At GE we have always taken immense pride in our purpose of building a world that works. The world demands-and deserves-we bring our best to solve the biggest challenges in flight, healthcare, and energy.
By creating three industry-leading, global public companies, each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees. We are putting our technology expertise, leadership, and global reach to work to better serve our customers.”
Culp will serve as non-executive chairman of the GE healthcare company upon its spin-off.
He will continue to serve as chairman and CEO of GE until the second spin-off, at which point, he will lead the GE aviation-focused company going forward.
Peter Arduini will assume the role of president and CEO of GE Healthcare effective January 1, 2022.
Peter Arduin
Scott Strazik will be the CEO of the combined Renewable Energy, Power, and Digital business while John Slattery continues as CEO of Aviation.
Scott Strazik
GE intends to execute the spin-offs of Healthcare in early 2023 and of the Renewable Energy and Power business in early 2024.
John Slattery
The respective capital structures, brands, and leadership teams for each independent company will be determined and announced later.
Where required to do so, GE will consult with employee representatives in line with its legal obligations before any final decisions are taken.
Through the transition, GE will be able to monetize its stakes in AerCap and Baker Hughes, prioritizing further debt reduction.
Each of the three resulting independent companies will be well capitalized with investment-grade ratings.
Following the spin-off transactions, GE will retain other assets and liabilities of GE today, including run-off insurance operations.
Upon closing the Healthcare transaction, GE expects to retain a stake of 19.9 percent in the healthcare company to provide capital allocation flexibility.
GE also intends that Healthcare will issue debt securities, the proceeds of which will be used to pay down outstanding GE debt.
The transactions are not subject to bondholder consent.
The company expects to incur one-time separation, transition, and operational costs of approximately $2 billion and tax costs of less than $0.5 billion, which will depend on specifics of the transaction.
The proposed spin-offs of Healthcare and the Renewable Energy and Power business are intended to be tax-free for GE and GE shareholders for U.S. federal income tax purposes.
The transactions are subject to the satisfaction of customary conditions, including final approvals by GE’s Board of Directors, private letter rulings from the Internal Revenue Service and/or tax opinions from counsel, the filing and effectiveness of Form 10 registration statements with the U.S. Securities and Exchange Commission, and satisfactory completion of financing.
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.
Lumentum to acquire NeoPhotonics for $16 per share in cash
Lumentum (LITE) and NeoPhotonics (NPTN) announced that they have entered into a definitive agreement under which Lumentum will acquire NeoPhotonics for $16.00 per share in cash, which represents a total equity value of approximately $918M.
NeoPhotonics Corporation develops, manufactures, and sells optoelectronic products that transmit and receive high speed digital optical signals for cloud and hyperscale data center internet content provider and telecom networks worldwide.
Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates in two segments, Optical Communications (OpComms) and Commercial Lasers (Lasers).
Laser chips made by Lumentum
The transaction has been unanimously approved by the boards of directors of both companies.
The purchase price represents a premium of approximately 39% to NeoPhotonics’ closing stock price on November 3, 2021.
Laser chips made by NeoPhotonics
Lumentum intends to finance the transaction through cash from the combined company’s balance sheet.
Related to the transaction, Lumentum will provide up to $50M in term loans to NeoPhotonics to fund anticipated growth, which may require increased working capital and manufacturing capacity.
The transaction is expected to close in the second half of calendar year 2022, subject to approval by NeoPhotonics’ stockholders, receipt of regulatory approvals, and other customary closing conditions.
“With NeoPhotonics, we’re making another important investment in better serving our customers and expanding our photonics capabilities at a time when photonics are at the forefront of favorable long-term market trends. At the center of our strategy is a relentless focus on developing a differentiated portfolio with the most innovative products and technology in our industry so that we can help our customers compete and win in their respective markets.
Adding NeoPhotonics’ differentiated products and technology and innovative R&D team is consistent with this strategy and together, we will better meet the growing need for next generation optical networking solutions. We are confident this transaction will make us an even better partner to our customers, while enabling our team to deliver significant, long-term value to our stockholders. We look forward to welcoming NeoPhotonics’ talented team of employees to Lumentum,” said Alan Lowe, Lumentum President and CEO.
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.
AbbVie’s cariprazine met primary endpoint in Phase 3 study
AbbVie (ABBV) announced top-line results from two Phase 3 clinical trials, Study 3111-301-001 and Study 3111-302-001, evaluating the efficacy and safety of cariprazine as an adjunctive treatment for patients with major depressive disorder.
Cariprazine, sold under the brand names Vraylar in the United States and Reagila in the European Union, is an atypical antipsychotic which is used in the treatment of schizophrenia, bipolar mania, and bipolar depression.
Drug pipeline looks very promising for Abbvie
In Study 3111-301-001, cariprazine showed a statistically significant change from baseline to week six in the Montgomery-Asberg Depression Rating Scale total score compared with placebo.
The Montgomery–Asberg Depression Rating Scale (MADRS) is a ten-itemdiagnostic questionnaire which psychiatrists use to measure the severity of depressive episodes in patients with mood disorders.
Patients treated with cariprazine at 1.5 mg/day achieved improved MADRS total score at week six compared to placebo.
Patients treated with cariprazine at 3.0 mg/day demonstrated improvement in MADRS total score at week six over placebo but did not meet statistical significance.
In Study 3111-302-001, cariprazine demonstrated numerical improvement in depressive symptoms from baseline to week six in MADRS total score compared with placebo but did not meet its primary endpoint for either the 1.5 mg/day or 3.0 mg/day dose.
In a previously published Phase 2/3 registration-enabling study, RGH-MD-75, patients treated with cariprazine flexible doses of 2.0-4.5 mg/day in addition to ongoing antidepressant therapy met the primary endpoint and achieved improved MADRS total scores at week eight compared to placebo.
Based on the positive results of studies 3111-301-001 and RGH-MD-75, and the totality of data reported, AbbVie intends to submit a supplemental New Drug Application with the U.S. FDA for the expanded use of cariprazine for the adjunctive treatment of MDD.
Separately, AbbVie reported Q3 Global Humira sales of $5.425B up 5.6% on reported basis.
In Q3, Global net revenues from the immunology portfolio were $6.674 billion, an increase of 15.3 percent on a reported basis, or 14.9 percent on an operational basis.
Global Humira net revenues of $5.425 billion increased 5.6 percent on a reported basis, or 5.2 percent on an operational basis.
U.S. Humira net revenues were $4.613 billion, an increase of 10.1 percent.
Internationally, Humira net revenues were $812 million, a decrease of 14.6 percent on a reported basis, or 16.7 percent on an operational basis, due to biosimilar competition.
Treatment for Psoriasis
Global Skyrizi net revenues were $796 million. Global Rinvoq net revenues were $453 million.
Treatment for moderate to severe rheumatoid arthritis
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.
Exxon Mobil announces plans to build plastic waste recycling facility
Exxon Mobil (XOM) plans to build its first, large-scale plastic waste advanced recycling facility in Baytown, Texas, and is expected to start operations by year-end 2022.
A smaller, temporary facility, is already operational and producing commercial volumes of certified circular polymers that will be marketed by the end of this year to meet growing demand.
The new facility follows validation of Exxon Mobil’s initial trial of its proprietary process for converting plastic waste into raw materials.
“We’ve proven our proprietary advanced recycling technology in Baytown, and we’re scaling up operations to supply certified circular polymers by year-end,” said Karen McKee, president of ExxonMobil Chemical Company. “Availability of reliable advanced recycling capacity will play an important role in helping address plastic waste in the environment, and we are evaluating wide-scale deployment in other locations around the world.”
To date, the trial has successfully recycled more than 1,000 metric tons of plastic waste, the equivalent of 200M grocery bags, and has demonstrated the capability of processing 50 metric tons per day.
Upon completion of the large-scale facility, the operation in Baytown will be among North America’s largest plastic waste recycling facilities and will have an initial planned capacity to recycle 30,000 metric tons of plastic waste per year.
Operational capacity could be expanded quickly if effective policy and regulations that recognize the lifecycle benefits of advanced recycling are implemented for residential and industrial plastic waste collection and sorting systems.
ExxonMobil is developing plans to build approximately 500,000 metric tons of advanced recycling capacity globally over the next five years.
In Europe, the company is collaborating with Plastic Energy on an advanced recycling plant in Notre Dame de Gravenchon, France, which is expected to process 25,000 metric tons of plastic waste per year when it starts up in 2023, with the potential for further expansion to 33,000 metric tons of annual capacity.
The company is also assessing sites in the Netherlands, the U.S. Gulf Coast, Canada, and Singapore.
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