Zoe’s Kitchen sold for $300 million

Zoe’s Kitchen to be acquired by CAVA Group for $12.75 per share

Zoe's Kitchen sold for $300 million, Stockwinners
Zoe’s Kitchen sold for $300 million, Stockwinners

Zoe’s Kitchen (ZOES) announced that it has entered into a definitive agreement to be acquired in a transaction by privately held Cava Group, fast-growing Mediterranean culinary brand with 66 restaurants.

The combined companies will have 327 restaurants in 24 states throughout the U.S. Under the terms of the agreement, Zoes Kitchen shareholders will receive $12.75 in cash for each share of common stock they hold.

This represents a premium of approximately 33% to Zoes Kitchen’s closing share price on August 16, 2018 and a premium of approximately 33% to Zoes Kitchen 30-day volume weighted average price ended on August 16, 2018, and an enterprise value of approximately $300M.

The acquisition of Zoes Kitchen will be financed through a significant equity investment in CAVA led by Act III Holdings, the investment vehicle created by Ron Shaich, founder, chairman, and former CEO of Panera Bread, and funds advised by The Invus Group, with participation from existing investors SWaN & Legend Venture Partners and Revolution Growth.

After closing, Brett Schulman, current CEO of CAVA, will serve as CEO of the combined company and will work closely with the existing leadership teams at Zoes Kitchen and CAVA to oversee their growth and evolution.

Ron Shaich will serve as Chairman of the combined company.

Consummation of the merger is subject to certain closing conditions, including the adoption of the merger agreement by the holders of a majority of the Company’s outstanding common stock, and the expiration or early termination of all applicable waiting periods under the HSR Act.

CAVA has agreed to pay to the Company a $17M termination fee if the merger agreement is terminated under certain circumstances and the merger does not occur.

The parties expect the merger to close in the fourth quarter of 2018.

Under the terms of the merger agreement, the Company is permitted to actively solicit, for a 35-day period, alternative acquisition proposals from potential buyer and business combination candidates.

There can be no assurance that any superior proposals will be received during this solicitation process or that any alternative transaction providing for a superior proposal will be consummated.

Except as may be required by law, the Company does not intend to disclose any developments with respect to such a solicitation process unless and until the Company’s board of directors determines that it has received a superior proposal. The Company would be required to pay to CAVA an $8.5M termination fee if the Company terminates the merger agreement to accept a superior proposal under certain circumstances. T

he Company’s Board of Directors has determined that the merger agreement with CAVA is fair to and in the best interests of the Company and the holders of the Company’s common stock.

Zoes Kitchen also announced that it will not hold its previously scheduled second quarter 2018 earnings conference call and web simulcast on the morning of Friday, August 17 and will not issue a press release with second quarter 2018 financial results.

The Company expects to file its quarterly report with second quarter 2018 financial results on or before August 20, 2018.


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Starwood Property Trust goes shopping

Starwood Property to acquire GE Capital Project Finance Debt Business for $2.56B

Starwood Property goes shopping, Stockwinners
Starwood Property goes shopping, Stockwinners

Starwood Property Trust (STWD) announced that the company has entered into a definitive agreement to acquire GE Capital’s (GE) Energy Financial Services’ Project Finance Debt Business and loan portfolio for $2.56B, including $400M of unfunded loan commitments.

The acquired business will leverage the extensive experience of the company’s affiliate, Starwood Energy Group, which specializes in comparable energy infrastructure equity investments and has executed transactions with approximately $7B in asset value since its inception in 2005.

GE’s Energy Project Finance Debt Business includes a vertically integrated platform with a seasoned leadership team and 21 full-time employees across loan origination, underwriting, capital markets and asset management.

The Loan Portfolio consists of 51 senior loans secured by energy infrastructure real assets.

The company anticipates the transaction will be accretive to core earnings.

The company expects to finance the transaction with a new secured term loan facility from MUFG with an initial advance of approximately $1.7B and committed capacity for future funding obligations in the Loan Portfolio.

The company has ample available liquidity in addition to a $600M committed acquisition facility from Credit Suisse and Citigroup Global Markets Inc. to fund the balance of the purchase price.

The completion of the acquisition is subject to the satisfaction of a number of customary conditions and is expected to close in the third quarter of 2018.

STWD closed at $22.45. GE closed at $13.16.


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BofI to acquire $3B of deposits from Nationwide Bank

BofI in pact to acquire $3B of deposits from Nationwide Bank, sees accretion

BofI to acquire $3B of deposits from Nationwide Bank, Stockwinners
BofI to acquire $3B of deposits from Nationwide Bank, Stockwinners

BofI Holding (BOFI), parent of BofI Federal Bank, announced that the Bank has signed a deposit purchase and assumption agreement with Nationwide Bank to acquire approximately $3B in deposits from Nationwide Bank, including $1B in checking, savings and money market accounts and $2B in time deposit accounts.

BofI and Nationwide Bank expect to receive regulatory approval and complete the deposit acquisition and transfer during the fourth quarter of 2018.

“We are excited to welcome Nationwide Bank’s nearly 100,000 deposit customers to BofI,” began Gregory Garrabrants, President and Chief Executive Officer of BofI Holding, Inc.

“Our track record of successfully completing similar transactions with Principal Bank and H&R Block provide us with a high degree of confidence that we will have a seamless transition.

We look forward to offering Nationwide Bank customers our full suite of consumer, commercial and small business banking products and services once the transaction closes.”

A deposit premium commensurate with the fair market value of the deposits purchased will be funded from excess capital at the Bank. The Company expects the transaction to be immediately accretive to earnings and tangible book value.

BOFI closed at $39.64.


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US Foods to acquire SGA’s Food for $1.8B

US Foods to acquire SGA’s Food group of Companies for $1.8B 

US Foods to acquire SGA's Food for $1.8B, Stockwinners
US Foods to acquire SGA’s Food for $1.8B, Stockwinners

US Foods (USFD) and Services Group of America announced that they have entered into a definitive agreement under which US Foods will acquire five operating companies collectively known as SGA’s Food Group of Companies, for $1.8B in cash.

The transaction has been unanimously approved by US Foods’ Board of Directors.

Headquartered in Scottsdale, Arizona, SGA’s Food Group of Companies has combined 2017 net sales of $3.2B and approximately 3,400 employees.

SGA’s Food Group of Companies currently operates as five separate operating companies.

US Foods will finance the acquisition primarily with $1.5B in fully committed term loan financing from J.P. Morgan and Bank of America Merrill Lynch and will fund the balance of the purchase price through its existing liquidity resources.

At the closing of the acquisition, US Foods’ pro forma net leverage is expected to be 4.1x.

Given the combined company’s strong cash flow generation, including synergies, US Foods expects to reduce net leverage to approximately 3.0x by the end of fiscal 2020. The acquisition is subject to regulatory approval and other customary closing conditions.

US Foods expects to achieve approximately $55M in annual run-rate cost synergies by the end of fiscal 2022, primarily driven by savings in distribution, procurement and administrative expenses.

The purchase price reflects a multiple of 12.5x SGA’s Food Group of Companies 2018E Adjusted EBITDA of $123 million, after taking into account the approximately $260 million estimated present value of cash tax benefits to be realized as a result of the acquisition. Including $55M in annual run-rate synergies, the price reflects a 2018E Adjusted EBITDA multiple of 8.6x.

Excluding amortization, the transaction is expected to become accretive to US Foods’ Adjusted EPS in the second full year following closing.

USFD closed at $40.60.


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Supervalu sold for $2.9 billion

United Natural Foods to acquire Supervalu for $32.50 per share in cash, or $2.9B

Supervalu sold for $32.50 per share in cash, or $2.9B, Stockwinners
Supervalu sold for $32.50 per share in cash, or $2.9B, Stockwinners

United Natural Foods (UNFI) and SUPERVALU (SVU) announced that they have entered into a definitive agreement under which UNFI will acquire SUPERVALU for $32.50 per share in cash, or approximately $2.9B, including the assumption of outstanding debt and liabilities.

UNFI expects to finance the transaction substantially with debt and Goldman Sachs provided committed financing in the transaction.

Over time, UNFI plans to divest SUPERVALU retail assets in a thoughtful and economic manner. Upon closing, UNFI’s net debt-to-EBITDA ratio is expected to be high.

With strong cash flows, proceeds from divestitures and commitment to reducing debt, the company anticipates reducing leverage by at least two full turns in the first three years.

The transaction has been approved by the boards of directors of both companies and is subject to antitrust approvals, SUPERVALU shareholder approval and other customary closing conditions, and is expected to close in the fourth quarter of calendar year 2018.

UNFI Chief Executive Officer and Chairman Steven Spinner will lead the combined entity. Sean Griffin, UNFI Chief Operating Officer, will lead the SUPERVALU integration efforts, post close and lead an integration committee comprised of executives from both companies to drive the implementation of best practices from each company and the delivery of important synergies and a rapid and smooth integration.

UNFI closed at $41.18.


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Veritex, Green Bancorp to merge 

Veritex, Green Bancorp to merge 

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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Arconic higher following report of private equity interest

Arconic higher following report of private equity interest

Arconic higher following report of private equity interest, Stockwinners
Arconic higher following report of private equity interest, Stockwinners

Shares of Arconic (ARNC) are rising following a report that the aluminum producer has received interest from private equity firms including Apollo Global Management (APO).

PE  INTEREST

Arconic has received takeover interest from private-equity firms, including Apollo Global, The Wall Street Journal reported Friday.

A deal for the aerospace parts maker, which currently has a market value of $8.3B, could be worth over $10B, but no buyout agreement is imminent, the report said.

The company, which also holds $6.4B in debt, has a tumultuous recent history, facing an activist investor campaign from Elliott Management after being separated from the aluminum business now known as Alcoa (AA) in 2016.

The campaign led to the resignation of former Arconic Chief Executive Officer Klaus Kleinfeld and an overhaul of the company’s board.

In addition, the company came under scrutiny after investigators discovered its aluminum composite panels contributed to the spread of a fire last year at London’s Grenfell Tower that killed 80 people.

At the time, Arconic said it had no control over how its products were used in the building.

‘PLAUSIBLE LBO CANDIDATE’

Following the WSJ report, Morgan Stanley analyst Rajeev Lalwani said two things stand out to make Arconic a “plausible” leveraged buyout candidate: Its low EV/EBITDA multiple, which creates potentially favorable entry and exit points, and its cash flow profile, which has room for improvement.

The analyst stated that a more lean and efficient approach could support considerably better cash generation.

While the reported private equity interest “adds a level of intrigue,” Lalwani still believes headwinds within it rings and disks business, working capital and CapEx issues and volatility associated with aluminum prices will be the key driver of shares in the near-term.

Given the aforementioned execution concerns, Lalwani kept an Equal Weight rating and $20 price target on Arconic shares.

‘VERY VIABLE LBO CANDIDATE’

Credit Suisse analyst Curt Woodworth said he views Arconic as a “very viable” leveraged buyout candidate given its “highly depressed” multiples, operational and financial mismanagement, and “very strong” positions in automotive and aerospace end markets.

The analyst believes the issues at Firth Rixson are “very fixable” as the company is a new entrant into the disks market and said Arconic could be worth $24-$26 per share in a buyout. Woodworth has an Outperform rating on the shares with a $28 price target.

WHAT’S NOTABLE

On Monday, Arconic announced it had signed a new long-term contract with Boeing (BA) to supply aluminum sheet and plate for all models produced by Boeing Commercial Airplanes.

The multiyear contract, which extends and adds to the companies’ 2014 contract, is the largest to date and captures growth in the build rate increases of the Boeing 737 program.

PRICE ACTION

Arconic rose about 10%, or $1.73, to $19.12 in morning.


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Pfizer shares lower after talk with President prompts rollback

Pfizer under pressure after talk with President prompts rollback

Pfizer shares lower after talk with President prompts rollback, Stockwinners
Pfizer shares lower after talk with President prompts rollback, Stockwinners

After speaking with President Donald Trump, Pfizer (PFE) stated that it will roll back its July 1 price increases “to give the president an opportunity to work on his blueprint to strengthen the healthcare system and provide more access for patients.”

Additionally this morning, the company announced that it will reorganize into three units, separating its consumer health-care business, which the drugmaker has been trying to sell since last year, from its groups focused on “innovative” medicines” and “established” medicines.

PRICE ROLLBACK

In a statement provided to CNBC’s Meg Tirrell yesterday, Pfizer said it will roll back its July 1 price increases “to give the president an opportunity to work on his blueprint to strengthen the healthcare system and provide more access for patients.”

The company released the statement following an “extensive discussion” with President Trump. Pfizer said it will return such prices to their pre-July 1 levels as soon as technically possible, and the prices will remain in effect until the earlier of when the president’s blueprint goes into effect or the end of the year. In addition, the drug giant said that the price declines the company took as of July 1 will remain in effect.

This comes after President Trump called out the company and other drugmakers for raising prices.

In a tweet, Trump previously said Pfizer and peers “should be ashamed that they have raised drug prices for no reason,” accusing the company and industry of “merely taking advantage of the poor and others unable to defend themselves, while at the same time giving bargain basement prices to other countries in Europe and elsewhere.”

BUSINESS REORGANIZATION

This morning, Pfizer also announced it will organize the company into three businesses, namely a science-based Innovative Medicines business that will now include biosimilars and a new hospital business unit for anti-infectives and sterile injectables; an off-patent branded and generic Established Medicines business operating with substantial autonomy within Pfizer; and a Consumer Healthcare business.

These changes will be effective at the beginning of the company’s 2019 fiscal year, and are not expected to impact current capital allocation priorities or full-year 2018 financial guidance.

READ-THROUGH TO OTHERS IN THE SECTOR

Commenting on the events, Wells Fargo analyst David Maris told investors that drug stocks will not react favorably to this news, given the chilling effect this will likely have on others looking to take price increases.

Nonetheless, the analyst pointed out that the price increases taken in July are only small compared to other increases taken over the past year or several years, so the impact of the rollback to the healthcare system is insignificant in the big picture.

Maris also added that he believes the administration’s and other key legislators’ focus is not only on drug pricing, but on the overall supply chain and delivery system, including drug rebating, co-pay coupons, etc.

WHAT’S NOTABLE

According to Bloomberg, Gilead (GILD), Roche (RHHBY), Novo Nordisk (NVO) and Novartis (NVS) have all sent notices to California health plans rescinding or reducing previously announced price hikes in the wake of a new drug pricing transparency law that was enacted in the state.

The California measure, which is among the most aggressive efforts by states to rein in drug costs, is being challenged in court by the drug industry’s lobbying group, the report noted.

Other large cap pharmaceutical companies include AstraZeneca (AZN), Bristol-Myers (BMY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), and Sanofi (SNY).

PRICE ACTION

In morning trading, shares of Pfizer have dropped about 0.5% to $37.28.


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Xplore Technologies sold for $90 million

Zebra Technologies to acquire Xplore Technologies for $6.00 per share 

 

Xplore Technologies sold for $90 million, Stockwinners
Xplore Technologies sold for $90 million, Stockwinners

Zebra Technologies (ZBRA) and Xplore Technologies (XPLR) announced that their boards of directors have approved a definitive agreement in which Zebra will acquire all outstanding common stock of Xplore for $6.00 per share in cash.

Under the terms of the agreement, Zebra plans to implement the acquisition via a tender offer. Xplore has established a leading position as an innovative developer of semi-, fully- and ultra-rugged tablets, 2-in-1 laptops, and a range of performance matched accessories.

These products serve existing vertical markets for Zebra such as retail, manufacturing, transportation & logistics and healthcare, and provide an inroad into new markets including oil & gas, utility, government and public safety. Xplore generated revenue of $87M in the 12-month period ended March 31.

Zebra is effecting the acquisition through a public tender offer for 100% of the shares of Xplore.

In connection with the execution of the merger agreement, certain Xplore shareholders have entered into tender support agreements with Zebra pursuant to which they have agreed to tender their shares to Zebra’s offer.

The aggregate consideration of the transaction, including assumed indebtedness, is expected to be less than or equal to $90M.

Zebra expects to fund the transaction with a combination of cash on hand along with fully committed financing available under its credit facility. The transaction is subject to customary closing conditions and is expected to close in Q3.

XPLR closed at $4.12.


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Amazon.com launches new delivery business

Amazon.com launches new offering to help entrepreneurs start delivery businesses

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Amazon.com launches new delivery business

Amazon (AMZN) announced the launch of a new offering that helps entrepreneurs build their own companies delivering Amazon packages.

Amazon will take an active role in helping interested entrepreneurs start, set up and manage their own delivery business.

Successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles.

Individual owners can build their business knowing they will have delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance.

Over time, Amazon will empower hundreds of new, small business owners to hire tens of thousands of delivery drivers across the U.S., joining a robust existing community of traditional carriers, as well as small-and-medium-sized businesses that already employ thousands of drivers delivering Amazon packages.

The offering provides technology and operational support to individuals with little to no logistics experience the opportunity to run their own delivery business.

To help keep startup costs as low as $10,000, entrepreneurs will also have access to a variety of exclusively negotiated discounts on important resources they’ll need to operate a delivery business.

The deals are available on Amazon-branded vehicles customized for delivery, branded uniforms, fuel, comprehensive insurance coverage, and more.

Amazon is constantly looking for hands-on leaders who think big and deliver results for our customers. These principles are very familiar to those who have served our country in the armed forces.

The company is committing $1M towards funding startup costs for military veterans, offering $10,000 reimbursements for qualified candidates to build their own businesses.

AMZN closed at $1,660.51.


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GE to spin off several divisions

  • GE Healthcare to become standalone company

  • GE plans to fully separate Baker Hughes

GE introduces new company AiRXOS, Stockwinners
GE to spin off several of its divisions

GE (GE) announced the results of its strategic review.

GE will focus on Aviation, Power and Renewable Energy, creating a simpler, stronger, leading high-tech Industrial company.

In addition to the pending combination of its Transportation business with Wabtec, GE plans to separate GE Healthcare into a standalone company, pursue an orderly separation from BHGE (BHGE) over the next two to three years, make its corporate structure leaner and substantially reduce debt.

GE’s Board of Directors unanimously approved the plans announced today.

GE is making fundamental changes to how it will run the company.

The new GE Operating System will result in a smaller corporate headquarters focused primarily on strategy, capital allocation, talent and governance.

It will result in better execution, increased speed and is expected to generate at least $500 million in corporate savings by the end of 2020.

Under the new GE Operating System, most resources and services traditionally held at the headquarters level will be realigned to the businesses. GE is targeting an Industrial net debt-to-EBITDA ratio of less than 2.5 times and a long-term A credit rating.

GE also plans to reduce Industrial net debt by approximately $25 billion by 2020 and maintain more than $15 billion of cash on the balance sheet.

GE expects to maintain its current quarterly dividend, subject to Board approval, until GE Healthcare is established as an independent entity.

At that time, the new GE Healthcare Board of Directors will determine GE Healthcare’s dividend policy, which GE expects to reflect healthcare industry practices.

Also at that time, the GE Board expects to adjust the GE dividend with a target dividend policy in line with industrial peers. Kieran Murphy, president and CEO of GE Healthcare, will continue to lead GE Healthcare as a standalone company, maintaining the GE brand.

GE expects to generate cash from the disposition of approximately 20% of its interest in the Healthcare business and to distribute the remaining 80% to GE shareholders through a tax-free distribution.

The structure, sequence and timing of these transactions will be determined and announced at a later date, but are expected to be completed over the next 12 to 18 months.

GE Healthcare will conduct business as usual throughout this process, continuing to serve its partners and customers.

GE plans to fully separate its 62.5% interest in BHGE in an orderly manner over the next two to three years. BHGE’s full stream offering brings together equipment, services and digital solutions to help its customers be more productive-a unique and powerful value proposition in a changing market.

The separation will provide BHGE with enhanced agility and the ability to focus on leading in the oil and gas industry.

Shares of the former DJIA component closed at $12.75.


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Valeritas reports positive insulin study, shares rise

Valeritas announces ‘positive’ results from V-Go WeArable Insulin Delivery study

Valeritas reports positive insulin study, Stockwinners
Valeritas reports positive insulin study, Stockwinners

Valeritas Holdings (VLRX) announced positive results from the EffectiveNess of V-Go WeArable Insulin Delivery for Basal-BoLus ThErapy Study.

Three poster presentations at the American Diabetes Association Meeting in Orlando, Florida, reported that patients who switched from insulin pens and syringes to V-Go significantly improved blood glucose while lowering insulin dose.

The first ENABLE Study poster evaluated the clinical benefits in patients with type 2 diabetes who switched from using insulin pens and syringes to deliver their insulin regimen with V-Go for insulin delivery.

The 283 patient, retrospective study demonstrated clinically and statistically significant reductions in A1C by over 1% and insulin total daily dose at three and seven months.

The percent of patients at high risk was reduced by nearly 50% after switching to V-Go.

In addition, over 50% of all patients in the study achieved an A1C less than 8%.

The second analysis from the ENABLE study confirmed V-Go provided a clinical benefit in a patient population poorly controlled on conventional basal-bolus therapy delivered by multiple daily injections using insulin pens and syringes.

The analysis in 186 patients with type 2 diabetes demonstrated lowering of A1C by -1.0 at three months which was sustained at seven months and statistically significant with a Pless than0.0001.

Insulin TDD was reduced by 30% with V-Go use. To determine if TDD was a factor in the change in A1C, patients were separated into three approximately equal groups based on baseline TDD, 60 to 90 U/day, or greater than 90 U/day.

Results demonstrated statistically significant A1C reductions across all TDD groups of -1.0, -0.8, -1.2, respectively, each with a Pless than0.001.

The third ENABLE study poster evaluated the impact of duration of diabetes on change in A1C and insulin TDD when switching patients with type 2 diabetes from insulin delivery via insulin pen or syringe to V-Go.

Patients with known duration of diabetes were stratified into five groups based on duration of diabetes. Clinically and statistically significant reductions in A1C from baseline at both three and seven-month intervals were observed in all five duration of diabetes strata.

All strata also benefited from reductions in TDD with the exception of the duration stratum with the lowest baseline TDD, which maintained similar dosing on V-Go compared to baseline.

VLRX closed at $1.42, It last traded at $2.25.


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ModSpace sold for $1.1 billion

Williams Scotsman to acquire ModSpace for approx. $1.1B

ModSpace sold for $1.1 billion, Stockwinners
ModSpace sold for $1.1 billion, Stockwinners

WillScot Corporation (WSC) announced that it has entered into a definitive agreement to acquire Modular Space Holdings, the parent holding company of Modular Space Corporation, for an enterprise value of approximately $1.1B. Williams Scotsman will indirectly acquire MS Holdings for a purchase price comprising $1,063,750,000 of cash consideration, 6,458,500 shares of WSC Class A common stock and warrants to purchase 10,000,000 shares of WSC Class A common stock at an exercise price of $15.50 per share, subject to customary adjustments.

The transaction, which is subject to customary closing conditions, is expected to close in 3Q18.

ModSpace, a privately-owned provider of office trailers, portable storage units and modular buildings, had approximately $1.1B of total assets as of March 31, 2018.

ModSpace generated $453M of total revenue, $18M of net income and $106M of Adjusted EBITDA for the twelve months ended March 31, 2018. Once combined, Williams Scotsman will have over 160,000 modular space and portable storage units serving a diverse customer base from approximately 120 locations across the United States, Canada and Mexico.

Williams Scotsman expects to capture $60M in annual cost synergies after integration, with approximately 80% of the forecast synergies expected to be realized on a full run-rate basis by the end of 2019.

Williams Scotsman also expects to benefit from the net operating tax loss carryforwards to be acquired in the transaction, and for the transaction to be accretive to earnings in 2019.

Williams Scotsman expects to expand its “Ready to Work” value proposition across the ModSpace fleet and customer base, a strategy that has driven double-digit organic Adjusted EBITDA growth in Williams Scotsman’s U.S. Modular segment in recent years and proven successful in Williams Scotsman’s acquisitions of Acton Mobile and Tyson Onsite.

Until the transaction closes, both companies will operate independently and execute on their respective strategic priorities. Williams Scotsman has secured committed financing to fund the transaction, which includes an amendment and expansion of its existing revolving ABL credit facility to $1.35B with an accordion feature allowing up to $1.8B of total capacity, a $280M secured bridge credit facility, and $320M unsecured bridge credit facility.

Williams Scotsman expects the permanent financing plan to include a combination of long-term debt and equity or equity-linked securities.

WSC closed at $12.15, it last traded at $14.10.


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Incyte says REACH1 trial met primary endpoint

Incyte says REACH1 trial met primary endpoint of ORR for Ruxolitinib

Incyte says REACH1 trial met primary endpoint, Stockwinners
Incyte says REACH1 trial met primary endpoint, Stockwinners

Incyte (INCY) announced positive topline results from its ongoing pivotal Phase 2 REACH1 trial evaluating ruxolitinib, or Jakafi, in combination with corticosteroids for the treatment of patients with steroid-refractory acute graft-versus-host disease.

The study met its primary endpoint, demonstrating an overall response rate of 55% at Day 28.

In addition, the best overall response rate , the number of patients achieving a response at any time point during the study, was 73%.

The most common treatment-emergent adverse events of any grade were anemia, thrombocytopenia and neutropenia.

Based on these data from REACH1, Incyte plans to file a Supplemental New Drug Application for the approval of ruxolitinib for the treatment of steroid-refractory acute GVHD with the U.S. FDA during the third quarter of 2018.

“The results of the REACH1 study demonstrate the potential of ruxolitinib to meaningfully improve the outcomes of allogeneic transplant patients who develop steroid-refractory acute GVHD and further underscore the promise of JAK inhibition to advance the treatment of this potentially-devastating condition,” said Steven Stein, M.D., Chief Medical Officer, Incyte.

“We look forward to sharing additional results from this study with the medical community, and to working with U.S. regulatory authorities to submit our supplementary new drug application seeking approval of ruxolitinib in this indication later this year.”

INCY closed at $73.43, it last traded at $74.65.


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Foundation Medicine sold for $2.4 billion

Roche acquires Foundation Medicine for $137 per share or $2.4B

Foundation Medicine sold or $2.4B, Stockwinners
Foundation Medicine sold or $2.4B

Roche (RHHBY) and Foundation Medicine (FMI) announced they have entered into a definitive merger agreement for Roche to acquire the outstanding shares of Foundation Medicine not already owned by Roche and its affiliates at a price of $137.00 per share in cash.

This corresponds to a total transaction value of $2.4B on a fully diluted basis, and a total company value of $5.3B on a fully diluted basis. This price represents a premium of 29% to FMI’s closing price on June 18.

The merger agreement has been unanimously approved by the board of Roche and a Special Committee of the independent directors of FMI and by its full board of directors with the Roche designated directors abstaining from the deliberations and vote.

All current members of the FMI board have indicated that they intend to tender their FMI shares in the tender offer. Under the terms of the merger agreement, Roche will promptly commence a tender offer to acquire all of the outstanding shares of FMI’s common stock not already owned.

The closing of the tender offer will be subject to a majority of FMI’s outstanding shares not already held by Roche being tendered in the tender offer, it noted.

In addition, the transaction is subject to other customary closing conditions. Following completion of the tender offer, Roche will acquire all remaining shares at the same price of $137 per share through a second step merger.

The closing of the transaction is expected to take place in the second half of 2018. Daniel O’Day, CEO Roche Pharmaceuticals, said, “This is important to our personalised healthcare strategy as we believe molecular insights and the broad availability of high quality comprehensive genomic profiling are key enablers for the development of, and access to, new cancer treatments.

We will preserve FMI’s autonomy while supporting them in accelerating their progress.”

FMI closed at $106.45. RHHBY closed at $26.39.


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