U.S. sues Teva Pharmaceuticals for kickbacks

Justice Department files False Claims Act against Teva Pharmaceuticals

The U.S. Attorney’s Office has filed a complaint under the False Claims Act against Teva Pharmaceuticals USA. and Teva Neuroscience (TEVA), the maker of Copaxone, a drug for multiple sclerosis.

The government alleges that Teva conspired with a specialty pharmacy, Advanced Care Scripts, and two purportedly independent foundations, Chronic Disease Fund and The Assistance Fund, to violate the Anti-Kickback Statute and False Claims Act by using the foundations as conduits to subsidize Medicare co-pays for Copaxone, all while steadily raising Copaxone’s price, the Justice Department said in a statement.

Teva Pharma. is accused of offering kickbacks

The government alleges that, from 2006 through at least 2015, Teva paid the two foundations well over $300M with the intent and understanding that the foundations would use Teva’s money to cover the Medicare co-pays of patients taking Copaxone. During the same period, Teva raised the price of Copaxone from approximately $17,000 per year to over $73,000 per year, according to the DOJ.

Copaxone is used to treat multiple sclerosis

Copaxone is a brand-name prescription drug. It’s approved to treat certain forms of multiple sclerosis (MS) in adults.

Chronic Disease Fund is accused of being part of the scheme

With MS, the immune system mistakenly attacks the nerves. The damaged nerves then have trouble communicating with brain. This condition can cause a wide variety of symptoms, such as muscle weakness and fatigue (lack of energy).

The Assistance Fund is accused of being part of the price kickback

Copaxone contains the active drug glatiramer acetate. It’s a disease-modifying therapy for MS. Copaxone helps to stop the immune system from attacking the nerves. The drug can reduce the number of MS relapses and also slow worsening of the disease.

Copaxone comes as a solution that’s given by subcutaneous injection (an injection under your skin).

Teva Pharmaceutical Industries Limited is an Israeli pharmaceutical company. The firm develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products in North America, Europe, and internationally. It is one of the largest generic drugmakers in the world.

Shares of Teva are down 9% to $10.52 in morning trading. 

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New York sues to dissolve NRA

New York Attorney General James files lawsuit to dissolve NRA

New York Attorney General Letitia James has filed a lawsuit seeking to dissolve the National Rifle Association.

According to a statement, “Attorney General James charges the organization with illegal conduct because of their diversion of millions of dollars away from the charitable mission of the organization for personal use by senior leadership, awarding contracts to the financial gain of close associates and family, and appearing to dole out lucrative no-show contracts to former employees in order to buy their silence and continued loyalty.

The suit specifically charges the NRA as a whole, as well as Executive Vice-President Wayne LaPierre, former Treasurer and Chief Financial Officer Wilson “Woody” Phillips, former Chief of Staff and the Executive Director of General Operations Joshua Powell, and Corporate Secretary and General Counsel John Frazer with failing to manage the NRA’s funds and failing to follow numerous state and federal laws, contributing to the loss of more than $64M in just three years for the NRA.

NY Attorney General Letitia James

In the complaint, Attorney General James lays out dozens of examples where the four individual defendants failed to fulfill their fiduciary duty to the NRA and used millions upon millions from NRA reserves for personal use, including trips for them and their families to the Bahamas, private jets, expensive meals, and other private travel.

In addition to shuttering the NRA’s doors, Attorney General James seeks to recoup millions in lost assets and to stop the four individual defendants from serving on the board of any not-for-profit charitable organization in the state of New York again.”

It further states that, “the NRA is alleged to have fostered a culture of noncompliance and disregard for internal controls that led to the waste and loss of millions in assets and contributed to the NRA reaching its current deteriorated financial state.

Vista Outdoor (VSTO), Stockwinners

The NRA’s internal policies were repeatedly not followed and were even blatantly ignored by senior leaders. Furthermore, the NRA board’s audit committee was negligent in its duty to ensure appropriate, competent, and judicious stewardship of assets by NRA leadership.

Specifically, the committee failed to assure standard fiscal controls, failed to respond adequately to whistleblowers, affirmatively took steps to conceal the nature and scope of whistleblower concerns from external auditors, and failed to review potential conflicts of interest for employees.

Smith & Wesson Brands (SWBI), Stockwinners

The lawsuit alleges that the four men instituted a culture of self-dealing, mismanagement, and negligent oversight at the NRA that was illegal, oppressive, and fraudulent.

They overrode and evaded internal controls to allow themselves, their families, favored board members, employees, and vendors to benefit through reimbursed expenses, related party transactions, excess compensation, side deals, and waste of charitable assets without regard to the NRA’s best interests.

Sturm, Ruger (RGR), Stockwinners

The complaint lays out numerous other instances in which LaPierre, Phillips, Powell, Frazer, and other executives and board members at the NRA abused their power and illegally diverted or facilitated the diversion of tens of millions of dollars from the NRA.

These funds were in addition to millions of dollars the four individual defendants were already receiving in grossly excessive salaries and bonuses that were not in line with the best practices and prudent standards for evaluating and determining compensation.”

Stocks to Watch

Companies in the firearm space include Sturm, Ruger (RGR), Smith & Wesson Brands (SWBI), and Vista Outdoor (VSTO).

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U.S. orders 600M doses of Covid-19 vaccine candidate for $1.95B

Pfizer, BioNTech to supply U.S. government up to 600M doses of vaccine candidate

Pfizer Inc. (PFE) and BioNTech SE (BNTX) announced the execution of an agreement with the U.S. Department of Health and Human Services and the Department of Defense to meet the U.S. government’s Operation Warp Speed program goal to begin delivering 300 million doses of a vaccine for COVID-19 in 2021.

Pfizer to provide 600M doses of its vaccine candidate

Under the agreement, the U.S. government will receive 100 million doses of BNT162, the COVID-19 vaccine candidate jointly developed by Pfizer and BioNTech, after Pfizer successfully manufactures and obtains approval or emergency use authorization from U.S. Food and Drug Administration.

The U.S. government will pay the companies $1.95B upon the receipt of the first 100 million doses, following FDA authorization or approval. The U.S. government also can acquire up to an additional 500 million doses.

Americans will receive the vaccine for free consistent with U.S. government’s commitment for free access for COVID-19 vaccines. The BNT162 program is based on BioNTech’s proprietary mRNA technology and supported by Pfizer’s global vaccine development and manufacturing capabilities.

The BNT162 vaccine candidates are undergoing clinical studies and are not currently approved for distribution anywhere in the world. BioNTech is the market authorization holder worldwide and will hold all trademarks for the potential product.

Both collaborators are committed to developing these novel vaccines with pre-clinical and clinical data at the forefront of all their decision-making.

Covid19 vaccine path to defeat the virus

The Pfizer/BioNTech vaccine development program is evaluating at least four experimental vaccines, each of which represents a unique combination of messenger RNA format and target antigen.

On July 1st, Pfizer and BioNTech announced preliminary data from BNT162b1, the most advanced of the four mRNA formulations. The early data demonstrates that BNT162b1 is able to produce neutralizing antibodies in humans at or above the levels observed in the plasma from patients who have recovered from COVID-19, and this was shown at relatively low dose levels.

Local reactions and systemic events were dose-dependent, generally mild to moderate, and transient. No serious adverse events were reported.

On July 20th, the companies announced early positive update from German Phase 1/2 COVID-19 vaccine study, including first T Cell response data.

Recently, two of the companies’ four investigational vaccine candidates received Fast Track designation from the U.S. Food and Drug Administration.

This designation was granted based on preliminary data from Phase 1/2 studies that are currently ongoing in the United States and Germany as well as animal immunogenicity studies.

Further data from the ongoing Phase 1/2 clinical trials of the four vaccine candidates will enable the selection of a lead candidate and dose level for an anticipated large, global Phase 2b/3 safety and efficacy study that may begin as early as later this month, pending regulatory approval.

If the ongoing studies are successful, Pfizer and BioNTech expect to be ready to seek Emergency Use Authorization or some form of regulatory approval as early as October 2020.

The companies currently expect to manufacture globally up to 100 million doses by the end of 2020 and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.

In addition to engagements with governments, Pfizer and BioNTech have provided an expression of interest for possible supply to the COVAX Facility, a mechanism established by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations and World Health Organization that aims to provide governments with early access to a large portfolio of COVID-19 candidate vaccines using a range of technology platforms, produced by multiple manufacturers across the world.

PFE closed at $36.69, last traded at $38.45. BNTX closed at $91.60, it last traded at $97.60.

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Rig Counts Collapse!

Baker Hughes reports U.S. rig count down 34 to 374 rigs

Baker Hughes (BKR) reports that the U.S. rig count is down 34 rigs from last week to 374, with oil rigs down 33 to 292, gas rigs down 1 to 80, and miscellaneous rigs unchanged at 2.

The international offshore rig count for April 2018 was 194. Stockwinners
The U.S. offshore rig count was 15.

The U.S. Rig Count is down 614 rigs from last year’s count of 988, with oil rigs down 513, gas rigs down 103, and miscellaneous rigs up 2 to 2.

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

The U.S. Offshore Rig Count is down 1 rig from last week to 15 and down 5 year-over-year.

The Canada Rig Count is down 1 rig from last week to 26, with oil rigs unchanged at 7 and gas rigs down 1 to 19.

WTI in 2020 has traded widely, Stockwinners

The Canada Rig Count is down 37 rigs from last year’s count of 63, with oil rigs down 15 and gas rigs down 22.

Meanwhile WTI has traded in a wide range this year. Today the June contract is up 4.5% to $24.50 per barrel.

Brent crude for June delivery is up 4.8% to $30.85 per barrel.

A 70-year crude oil price chart in today’s dollar; Stockwinners

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Tech Data sold for $5.4 billion

Tech Data to be acquired by Apollo Global for $130 per share in cash

Tech Data (TECD) announced it has entered into a definitive agreement to be acquired by an affiliate of funds managed by affiliates of Apollo Global Management (APO).

Tech Data is taken private at $130 per share, Stockwinners

Through the agreement, the affiliate of the Apollo Funds will acquire all of the outstanding shares of Tech Data common stock for $130 per share in a transaction with an enterprise value of approximately $5.4B.

Apollo buys Tech Data for $5.4B, Stockwinners

The purchase price represents a 24.5% premium to the unaffected 30-day volume weighted average closing share price of Tech Data’s common stock ended October 15, the last trading day prior to published market speculation regarding a potential transaction involving the company.

The Tech Data Board of Directors has unanimously approved the transaction and recommends that Tech Data shareholders vote in favor of the transaction.

The transaction is not subject to a financing condition and is expected to close in the first half of calendar year 2020, subject to the satisfaction of customary closing conditions including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, foreign regulatory approvals and approval by the holders of a majority of the outstanding Tech Data shares.

Tech Data expects to hold a Special Meeting of Shareholders to consider and vote on the transaction agreement as soon as feasible after the mailing of the proxy statement to shareholders.

Consistent with the Board’s commitment to maximizing shareholder value, the terms of the agreement provide that Tech Data will be permitted to actively solicit alternative acquisition proposals from third parties during a “go-shop” period from the date of the agreement until December 9.

There is no guarantee that this process will result in a superior proposal. Following the close of the transaction, Rich Hume will continue to lead Tech Data as CEO, and the company will continue to be headquartered in Clearwater, Florida.

Tech Data will become a privately held company, and Tech Data’s common shares will no longer be publicly listed.

Tech Data Corporation operates as an IT distribution and solutions company. The company offers endpoint portfolio solutions, including personal computer systems, mobile phones and accessories, printers, peripherals, supplies, endpoint technology software, and consumer electronics. It also provides advanced portfolio solutions, such as data center technologies comprising storage, networking, servers, advanced technology software, and converged and hyper-converged infrastructure, as well as specialized solutions. 

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Pancreatic cancer data sends shares of Tyme Technologies higher

Tyme Technologies presents updated data from TYME-88-Panc Phase II study

Tyme Techs. shares jump of data, Stockwinners

Tyme Technologies (TYME) announced that its multicenter open-label Phase II TYME-88-Panc study evaluating SM-88 as an oral monotherapy in patients with advanced pancreatic cancer continues to demonstrate encouraging results and a well-tolerated safety profile.

The data from the TYME-88-Panc study were presented at the European Society of Medical Oncology 21st World Congress on Gastrointestinal Cancer.

The Annual meeting is held in Barcelona this year, Stockwinners

Updated results from the ongoing multicenter open-label Phase II TYME-88-Panc study involved 49 heavily pretreated patients with radiographically progressive metastatic pancreatic cancer who had significant disease related morbidity before receiving TYME’s investigational agent SM-88.

More than 80% of patients had received at least two prior lines of therapy. Of the 49 patients, 38 patients were evaluable for efficacy, as defined in the protocol.

Pancreatic cancer, Stockwinners

TYME-88-Panc is a two-part study in which Part 1 was intended to determine optimal dosing and assess if early clinical benefit supported further development of SM-88 in pancreatic cancer.

This study is being performed under a TYME IND with input from the FDA prior to study initiation. In this study, based on information available as of April 25, 2019, the median overall survival of evaluable patients was 6.4 months.

Certain efficacy indicators correlate A RECIST clinical benefit rate of stable disease or better was achieved by 44% of patients with available imaging. Notably, patients achieving stable disease or better demonstrated a statistically significant improvement in survival with a 92% reduction in risk of death.

The CBR was durable with majority of these patients remaining in stable disease or better at more than 7 months after receiving treatment with SM-88.

The measurement of CTCs is emerging as an important prognostic indicator in patients with pancreatic cancer. This is now the second TYME study in cancer patients showing that SM-88 reduces CTCs.

In a previous study of patients with prostate cancer, SM-88 treatment was also associated with a reduction in CTC count. In the TYME-88-Panc study, a median reduction of 63% in CTC burden was observed in evaluable patients. Importantly, patients with available results reaching an 80% reduction or greater in CTCs demonstrated a 60% decrease in risk of death.

In addition to these findings from the TYME-88-Panc study, data were also presented on subgroup analyses. TYME identified several screening criteria that were associated with rapidly declining prognostic factors defined as greater than 2 lines of prior therapy; age greater than 75 years old; albumin less than 3.5 g/dl. Patients with no indicators of poor prognosis had a better trend in survival.

TYME identified key sub-groups of patients who performed better. Patients with 1 or 2 prior lines of therapy had a better trend in survival. Female patients had a statistically significant trend toward better survival. These encouraging findings warrant further clinical evaluation of these subgroups. As of April 25, 2019, the study reported that SM-88 was well tolerated with only 4.0% of patients who experienced serious adverse events deemed at least possibly related to SM-88. One patient with reported SAEs continued on treatment.

The TYME-88-Panc research results are from an investigational study. SM-88 is not approved for the treatment of patients with any disease condition.

TYME is up 30 cents to $1.52.

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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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Zayo Group sold for $35 per share

Zayo Group to be acquired by Digital Colony, EQT in deal valued at $14.3B

Zayo Group Holdings (ZAYO) announced that it has signed a definitive merger agreement to be acquired by affiliates of Digital Colony Partners and the EQT Infrastructure IV fund.

Zayo sold for $14.3 billion, Stockwinners

The transaction would result in Zayo transitioning from a public company to a private company.

Zayo Group Holdings, Inc. provides bandwidth infrastructure solutions for the communications industry in the United States, Canada, and Europe.

Under the new ownership, the Zayo team would continue to execute the Company’s strategy and remain headquartered in Boulder, Colorado.

Under the terms of the agreement, which was unanimously approved by Zayo’s Board of Directors, shareholders will receive $35.00 in cash per share of Zayo’s common stock in a transaction valued at $14.3 billion, including the assumption of $5.9 billion of Zayo’s net debt obligations.

The offer price represents a 32% premium to the volume-weighted price average of the last six months of $26.44. Dan Caruso, Zayo’s Chairman and CEO, said, “Digital Colony and EQT share our vision that Zayo’s Fiber Fuels Global Innovation.

Both are experienced global investors in the communications infrastructure space, and they appreciate our extraordinary fiber infrastructure assets, our highly talented team and our strong customer base. I am confident this partnership with EQT and Digital Colony will empower Zayo to accelerate its growth and strengthen its industry leadership.”

“Following a comprehensive review of strategic alternatives, the Zayo Board of Directors concluded that the sale of Zayo to Digital Colony and EQT Infrastructure is in the best interest of Zayo and all its stakeholders,” said Yancey Spruill, Zayo’s Lead Independent Director. “

The transaction delivers immediate and substantial value to shareholders and will strengthen Zayo’s financial flexibility, enabling the company to increase investments and better position itself for long-term growth and profitability.”

The closing of the deal is subject to customary conditions, including regulatory clearance and Zayo shareholder approvals.

The transaction is expected to close in the first half of calendar 2020.

Goldman Sachs and J.P. Morgan are serving as financial advisors to Zayo Group in connection with the transaction and Skadden Arps is serving as legal counsel.

Morgan Stanley and Deutsche Bank are acting as financial advisors to Digital Colony and EQT Infrastructure, and Simpson Thacher is serving as legal advisor.

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Chesapeake Lodging sold for $2.7 billion

Park Hotels & Resorts announces $2.7B acquisition of Chesapeake Lodging

Park Hotels buys Chesapeake Lodging, Stockwinners

Park Hotels & Resorts (PK) and Chesapeake Lodging Trust (CHSP) announced that they have entered into a definitive merger agreement under which Park will acquire all the outstanding shares of Chesapeake in a cash and stock transaction valued at approximately $2.7B.

Upon completion of the merger, the combined company will have an estimated enterprise value of $12B, firmly solidifying Park’s position as the second largest lodging REIT while also advancing the company’s strategic goals of portfolio enhancement and diversification.

The transaction has been approved by the board of directors and board of trustees of Park and Chesapeake, respectively.

Under the terms of the merger agreement, Chesapeake shareholders will receive $11.00 in cash and 0.628 of a share of Park common stock for each Chesapeake share.

The fixed exchange ratio represents an agreed upon price of $31.00 per share of Chesapeake shares of beneficial interest based on Park’s trailing 10-day volume weighted average price as of May 3.

Based on Park’s closing stock price on May 3, this represents $31.71 per share of aggregate value to Chesapeake shareholders and represents a premium of approximately 11% to Chesapeake’s trailing 10-day VWAP and approximately 8% to Chesapeake’s closing stock price on May 3.

Upon closing, Park stockholders and Chesapeake shareholders will own approximately 84% and 16% of the combined company, respectively.

The transaction is subject to customary closing conditions, including receipt of the approval of Chesapeake shareholders.

The companies currently expect the transaction to close in late third quarter or early fourth quarter.

Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States.

The Trust owns 20 hotels with an aggregate of 6,279 rooms in eight states and the District of Columbia.

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Lord Corporation sold for $3.7 billion

Parker-Hannifin to acquire LORD Corporation for $3.7B in cash

Parker Hannifin to buy Lord Corp., Stockwinners

Parker Hannifin (PH) announced that it has entered into a definitive agreement to acquire LORD Corporation for approximately $3.675B in cash.

The transaction has been approved by the Board of Directors of each company and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

LORD, headquartered in Cary, North Carolina, is a privately-held company founded in 1924 offering a broad array of advanced adhesives, coatings and specialty materials as well as vibration and motion control technologies.

Lord Corp. sold for $3.7 billion in cash, Stockwinners

LORD’s products are used in the aerospace, automotive and industrial markets. LORD has annual sales of approximately $1.1B and employs 3,100 team members across 17 manufacturing and 15 research and development facilities globally.

“This strategic transaction will reinforce our stated objective to invest in attractive margin, growth businesses, such as engineered materials, that accelerate us towards top-quartile financial performance,” said Tom Williams, Chairman and CEO of Parker.

“LORD will significantly expand our materials science capabilities with complementary products, better positioning us to serve customers in growth industries and capitalize on emerging trends such as electrification and lightweighting.

Upon closing of the transaction, LORD will be combined with Parker’s Engineered Materials Group.

Parker plans to finance the transaction using new debt.

Following the completion of the transaction, Parker expects to maintain a high investment grade credit profile.

The transaction is not expected to impact Parker’s dividend payout target averaging approximately 30-35% of net income over a five-year period, while maintaining its record of annual dividend increases.

The transaction is expected to be completed within the next four to six months and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

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