Aytu, Neos Therapeutics enter all-stock merger agreement
Aytu BioScience (AYTU) and Neos Therapeutics (NEOS) announced that they have entered into a definitive merger agreement pursuant to which Neos will merge with a wholly owned subsidiary of Aytu in an all-stock transaction.
Upon the effectiveness of the merger, Neos stockholders will be entitled to receive 0.1088 shares of common stock of Aytu for each share of Neos common stock held, after taking into account the one-for-ten reverse split of Aytu’s common stock that was effected on December 8.
The transaction will result in Neos stockholders owning approximately 30% of the fully diluted common shares of Aytu.
The all-stock transaction is valued, on a fully diluted basis, at approximately $44.9M based on the 10-day volume weighted average price of Aytu stock for the period ended December 9.
The combined entity will have an increased footprint in the prescription pediatric market, an established multi-brand ADHD portfolio addressing the $8.5B ADHD market and combined revenue scale.
For the 12-month period ending September 30, Neos generated $57M in revenues. On a combined pro-forma basis for this same period, Aytu and Neos’ aggregate net revenue is over $100M.
In addition, this merger facilitates operational and commercial synergies that can be harnessed to accelerate the path to profitability for the combined entity, with estimated annualized cost synergies of approximately $15M beginning FY22.
The combined company will be led by Josh Disbrow, CEO of Aytu and will be headquartered in Englewood, Colorado.
The board of the combined company will consist of six members designated by Aytu and two members designated by Neos, including Neos CEO and director Jerry McLaughlin and Neos director Beth Hecht.
The merger is currently expected to close by Q2 of 2021, subject to certain approvals by both Aytu and Neos stockholders and the satisfaction of other customary closing conditions.
As part of the transaction, Aytu has agreed to provide Neos with access to up to $5M cash for working capital needs for the period prior to the closing of the merger.
In addition, upon closing of the merger, $15M in principal of Neos’s existing senior secured debt facility with affiliates of Deerfield Management will be repaid, and Deerfield has agreed to allow the remaining debt under the facility to remain outstanding with the combined company following the merger.
Indebtedness under Neos’s existing ABL agreement with Encina Business Credit will also remain outstanding.
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.
Macquarie to acquire Waddell & Reed for $25 per share
Waddell & Reed (WDR) announced it has entered into a merger agreement with Macquarie Asset Management, the asset management division of Macquarie Group (MQBKY), under which Macquarie would acquire all of the outstanding shares of Waddell & Reed for $25.00 per share in cash representing total consideration of $1.7B.
The transaction represents a premium of approximately 48% to the closing price of Waddell & Reed common stock on December 1, 2020, the last trading day prior to the transaction announcement, and a premium of approximately 57% to Waddell & Reed’s volume-weighted average price for the last 90 trading days.
On completion of the transaction, Macquarie has agreed to sell Waddell & Reed Financial, Inc.’s wealth management platform to LPL Financial Holdings Inc. (LPLA), a U.S. retail investment advisory firm, independent broker-dealer, and registered investment advisor custodian, and also enter into a long-term partnership with Macquarie becoming one of LPL’s top tier strategic asset management partners.
As a result of the transaction, Macquarie Asset Management’s assets under management are expected to increase to over $465B, with the combined business becoming a top 25 actively managed, long-term, open-ended U.S. mutual fund manager by assets under management, with the scale and diversification to competitively position the business to maintain and extend its high standards of service to clients and partners.
The transaction has been approved by the Boards of Directors of Waddell & Reed Financial, Inc., Macquarie Group and LPL and is expected to close in the middle of 2021, subject to regulatory approvals, Waddell & Reed Financial, Inc. stockholder approval and other customary closing conditions.
Waddell & Reed Financial, Inc. provides investment management and advisory, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States.ย
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.
Salesforce acquires Slack in cash and stock deal worth $27.7B
Salesforce (CRM) and Slack Technologies (WORK) have entered into a definitive agreement under which Salesforce will acquire Slack.
Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on November 30.
The boards of each of Salesforce and Slack have approved the transaction and the Slack board recommends that Slack stockholders approve the transaction and adopt the merger agreement.
The transaction is anticipated to close in the second quarter of Salesforce’s fiscal year 2022.
Salesforce goes shopping
Salesforce has also entered into a voting agreement with certain stockholders of Slack common stock, under which each such stockholder has agreed to vote all of their Slack shares in favor of the transaction at the special meeting of Slack stockholders to be held in connection with the transaction, subject to certain terms and conditions.
The Slack shares subject to the agreement represent approximately 55% of the current outstanding voting power of the Slack common stock.
Salesforce expects to fund the cash portion of the transaction consideration with a combination of new debt and cash on Salesforce’s balance sheet.
One year chart of Slack Tech. stock price
Salesforce has obtained a commitment from Citigroup, Bank of America, and JPMorgan Chase for a $10B senior unsecured 364-day bridge loan facility.
Salesforce said, “Slack will be deeply integrated into every Salesforce Cloud.
Five year chart of Salesforce stock price
As the new interface for Salesforce Customer 360, Slack will transform how people communicate, collaborate and take action on customer information across Salesforce as well as information from all of their other business apps and systems to be more productive, make smarter, faster decisions and create connected customer experiences.”
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.
Powell says outlook for economy is ‘extraordinarily uncertain’
In prepared remarks for the Senate Committee on Banking, Housing, and Urban Affairs, Federal Reserve Chair Jay Powell said:
Jerome Powell say economy is on shaky ground
“Economic activity has continued to recover from its depressed second-quarter level. The reopening of the economy led to a rapid rebound in activity, and real gross domestic product, or GDP, rose at an annual rate of 33 percent in the third quarter.
In recent months, however, the pace of improvement has moderated.
Household spending on goods, especially durable goods, has been strong and has moved above its pre-pandemic level.
In contrast, spending on services remains low largely because of ongoing weakness in sectors that typically require people to gather closely, including travel and hospitality.
The overall rebound in household spending is due, in part, to federal stimulus payments and expanded unemployment benefits, which provided essential support to many families and individuals…
As we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and will depend, in large part, on the success of efforts to keep the virus in check…
Covid-19 has caused a global slowdown
The rise in new COVID-19 cases, both here and abroad, is concerning and could prove challenging for the next few months.
A full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.
Recent news on the vaccine front is very positive for the medium term. For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups.”
Meanwhile lawmakers in Washington have come up with a new stimulus plan. ย
A bipartisan group of U.S. lawmakers announced a $908B COVID-19 aid package aimed to breaking a monthslong deadlock between Democrats and Republicans over new emergency relief for small businesses, unemployed people, airlines, and other industries during the coronavirus crisis, Reuters’ Richard Cowan and Doina Chiacu report.
The bill has not yet been written into legislation, nor has it been embraced by the Republican White House, Democratic President-elect Joe Biden, or leaders in the Senate or House of Representatives, the authors note.
The package, however, does come with the support of a group of conservatives and moderates who believe it will appeal to a broad swath of Congress, the authors note.
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.
S&P Global (SPGI) and IHS Markit (INFO) announced they have entered into a definitive merger agreement to combine in an all-stock transaction which values IHS Markit at an enterprise value of $44B, including $4.8B of net debt.
Under the terms of the merger agreement, which has been unanimously approved by the boards of both companies, each share of IHS Markit common stock will be exchanged for a fixed ratio of 0.2838 shares of S&P Global common stock.
Upon completion of the transaction, current S&P Global shareholders will own approximately 67.75% of the combined company on a fully diluted basis, while IHS Markit shareholders will own approximately 32.25%.
Serving a global customer base across financial information and services, ratings, indices, commodities and energy, and transportation and engineering, the pro forma company will provide differentiated solutions to the workflows of many companies.
Combined, the two companies will provide solutions across data, platforms, benchmarks and analytics in ESG, climate and energy transition.
The pro forma company will have 76% recurring revenue and expects to realize 6.5%-8% annual organic revenue growth in 2022 and 2023, balanced across major industry segments.
The combined company will target 200 basis points of annual EBITA margin expansion.
The transaction is expected to be accretive to earnings by the end of the second full year post-closing.
The combined company expects to deliver annual run-rate cost synergies of approximately $480M, with approximately $390M of those expected by the end of the second year post-closing, and $350M in run-rate revenue synergies for an expected total run-rate EBITA impact of approximately $680M by the end of the fifth full year after closing.
The combined company expects to generate annual free cash flow exceeding $5B by 2023, with a targeted dividend payout ratio of 20%-30% of adjusted diluted EPS and a targeted total capital return of at least 85% of free cash flow between dividends and share repurchases.
Both companies expect to maintain their current dividend policies until the close of the transaction.
Following closing, the company will be headquartered in New York with a presence in key global markets across North America, Latin America, EMEA and Asia Pacific.
The leadership team will comprise senior leaders from both organizations.
Ewout Steenbergen, executive VP and CFO of S&P Global, will serve as CFO of the combined company.
Ewout Steenbergen will serve as CFO of the new company
The transaction is expected to close in the second half of 2021, subject to, among other things, the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, other antitrust and regulatory approvals, and other customary closing conditions.
The transaction requires the approval of shareholders of both S&P Global and IHS Markit and is not subject to any financing conditions.
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.
Collectors Universe to be acquired by investor group for approx. $700M
Collectors Universe (CLCT) announced that it has entered into a definitive agreement under which an investor group led by entrepreneur and sports card collector Nat Turner, D1 Capital Partners L.P., and Cohen Private Ventures will acquire all of the Company’s outstanding shares of common stock for $75.25 per share in cash.
Collectors Universe, Inc. provides authentication, grading, and related services to dealers, collectors, and retail buyers and sellers of coins, trading cards, event tickets, autographs, and historical and sports memorabilia in the United States. The company operates in three segments: Coins, Trading Cards and Autographs, and Other Collectibles. It also publishes magazines that provide market prices and information for various collectibles and high-value assets that are accessible on its websites.
Nat Turner pushed for this transaction
The transaction represents a premium of approximately 30% over the Company’s 60-day volume-weighted average price ended on November 25, 2020, the last full trading day before today’s announcement.
The transaction, which was approved by the Collectors Universe Board of Directors, represents fully diluted equity value of approximately $700M, and is not subject to any financing contingency.
Joseph J. Orlando, President and CEO of Collectors Universe, will continue to lead Collectors Universe, which will retain its headquarters in Santa Ana, California.
Joseph J. Orlando, President and CEO of Collectors Universe
The transaction will be completed through a cash tender offer for all of the outstanding common shares of Collectors Universe for $75.25 per share in cash, to be commenced as promptly as reasonably practicable, followed by a merger in which any remaining outstanding shares of Collectors Universe will be converted into the right to receive the same cash price per share paid in the tender offer.
The closing of the tender offer is subject to certain limited and customary conditions, including the tender by Collectors Universe shareholders of at least one share more than 50% of Collectors Universe’s issued and outstanding shares and expiration or early termination of the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The Collectors Universe Board of Directors recommends that all shareholders tender their shares in the offer.
The transaction is expected to close in the first calendar quarter of 2021.
Upon completion of the transaction, Collectors Universe will become a privately held company and its shares will no longer be listed on any public market.
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.
Sage Therapeutics, Biogen announce collaboration on SAGE-217, SAGE-324
Biogen (BIIB) and Sage Therapeutics (SAGE) announced that they have executed a global collaboration and license agreement to jointly develop and commercialize zuranolone for major depressive disorder, postpartum depression and other psychiatric disorders and SAGE-324 for essential tremor and other neurological disorders.
Sage receives a large investment from Biogen
Zuranolone, a potential first-in-class, two-week, once-daily oral therapy in development for the treatment of MDD and PPD, is currently in Phase 3 development as part of the LANDSCAPE and NEST clinical programs.
Zuranolone has breakthrough therapy designation from the U.S. Food and Drug Administration (FDA) for MDD and, if successfully developed and approved, has the potential to be a novel treatment paradigm in depression.
Biogen gambles on Sage’s depression drug
The vision for zuranolone in MDD and PPD is based on its potential, being evaluated in the LANDSCAPE and NEST development programs, to work rapidly and to continue providing sustained benefit beyond the period of dosing.
Together, these two features, if supported by positive clinical efficacy and safety data, could provide an alternative option to how depression is treated today based on a target profile of an “as-needed” short course of treatment for a depressive episode, with rapid and sustained efficacy and favorable tolerability.
The development of an “as-needed” treatment for depression may help ease the difficulties associated with chronic use of antidepressants and may enhance quality of life and patient adherence.
To date, two positive pivotal studies have been completed with zuranolone 30 mg, one in MDD (MDD-201) and one in PPD.
Additionally, while the Phase 3 MOUNTAIN Study of zuranolone in MDD did not meet its primary endpoint, the encouraging data from the recently announced MOUNTAIN six-month follow-up period and the topline interim SHORELINE Study analysis, suggest the potential for zuranolone, if successfully developed and approved, to be uniquely positioned as a disruptive, distinct and novel treatment approach for patients.
Biogen and Sage believe that zuranolone is clinically active in MDD based on the data compiled to date and look forward to planned data readouts in 2021.
Sage is pursuing three development pathways for zuranolone in the U.S.: PPD; acute rapid response therapy in MDD when co-initiated with new standard antidepressant therapy; and “as-needed,” or episodic, treatment of MDD.
As a result, Sage is advancing four additional pivotal studies evaluating a 50 mg dose of zuranolone: a Phase 3 study in PPD, a Phase 3 study of use as an acute RRT in patients with MDD when co-initiated with new standard antidepressant therapy , a Phase 3 study in the acute treatment of MDD and an open label Phase 3 study evaluating the long-term safety, tolerability and efficacy of “as-needed” repeat treatment. Data from these studies are expected in 2021.
Upon closing of the transaction, Biogen and Sage will collaborate to further define the development and commercialization strategy for zuranolone.
Beyond PPD and MDD, zuranolone may also have potential in other psychiatric disorders including bipolar disorder and generalized anxiety disorder. SAGE-324 is a next-generation positive allosteric modulator of GABAA receptors in Phase 2 development for essential tremor with potential in other neurological conditions such as epilepsy and PD.
Essential tremor is one of the most common movement disorders estimated to affect over six million patients in the U.S., and current standard of care may be inadequate for many.
Following encouraging results from a Phase 1 open-label study in essential tremor, Sage advanced SAGE-324 to the Phase 2a KINETIC Study, which Sage is currently conducting.
The KINETIC Study is a 28-day placebo-controlled study in patients with essential tremor expected to read out in 2021.
Upon closing of the transaction, Biogen and Sage will collaborate to further define the development and commercialization strategy for SAGE-324 in essential tremor and, as appropriate, for potential expansion into other neurological disorders.
The strategic collaboration is global in scope and under the terms of the agreement, Sage will receive $1.525 billion in cash to be comprised of an upfront payment of $875 million and a $650 million equity investment in Sage from the purchase of approximately 6.2 million newly issued shares of Sage common stock at a price of $104.14 per share, representing a premium of 40 percent over the 30-day volume-weighted average share price of $74.39 per share as of November 25, 2020.
Should the zuranolone and SAGE-324 programs achieve certain development and commercial milestones, Sage will be eligible to receive up to approximately $1.6 billion in potential milestone payments. Biogen and Sage will share responsibility and costs for development as well as profits and losses for commercialization in the U.S.. Outside the U.S., Biogen will be responsible for development and commercialization, excluding Japan, Taiwan and South Korea with respect to zuranolone, and will pay Sage tiered royalties in the high teens to low twenties. Closing of the transaction is contingent on completion of review under antitrust laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the U.S., and other customary closing conditions. The transaction is expected to close by the end of January 2021.
BIIB last traded at $241.75. SAGE last traded at $84.00.
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.
Intuit gets DOJ nod to buy Credit Karma after pact to sell tax unit to Square
Intuit (INTU) and Credit Karma announced that they have entered into a consent decree with the U.S. Department of Justice, or DOJ, which they call “an important step” in completing their previously announced merger.
The companies also announced that they have entered into an Assurance of Discontinuance with the New York State Attorney General that, along with the DOJ action, moves Intuit’s acquisition of Credit Karma “one step closer to closing,” subject to the satisfaction of customary closing conditions.
Intuit and Credit Karma also announced Credit Karma’s agreement with Square (SQ), pursuant to which Credit Karma will divest its Credit Karma Tax business to Square.
The completion of the transaction with Square is contingent upon the successful closing of Intuit’s acquisition of Credit Karma, among other customary closing conditions.
As part of the divestiture transaction, Intuit and Credit Karma have made certain commitments to Square, including the provision of certain transition services to help ensure a successful transition of the business.
“We are very excited to reach this important milestone today. This brings us one step closer to transforming personal finance by making it simpler for consumers to find the right financial products, put more money in their pockets, and provide financial expertise and advice.
We are pleased to have cleared this necessary regulatory review with DOJ and appreciate their careful consideration of this transaction.
Consumers will continue to benefit from the Credit Karma Tax product as part of Square,” said Sasan Goodarzi, CEO of Intuit.
Shares of Square (SQ) are up 5.2% while Intuit shares are up 1.5%.
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.
GigCapital2 to combine with UpHealth, Cloudbreak Health in $1.35B merger
GigCapital2 (GIX) announced that it has entered into two separate definitive business combination agreements with each of UpHealth and Cloudbreak Health to form a combined entity that will create a publicly traded, global digital healthcare company.
Digital healthcare has become more prevalent during the pandemic
Upon the closing of the transaction, the combined company will be named UpHealth and will continue to be listed on the NYSE under the new ticker symbol (UPH).
Following the combination, UpHealth will be a global digital healthcare company serving an entire spectrum of healthcare needs and will be established in fast growing sectors of the digital health industry.
With its combinations, Upon closing the pending mergers and the combination with Cloudbreak, UpHealth will be organized across four capabilities at the intersection of population health management and telehealth: Integrated Care Management, Global Telehealth, Digital Pharmacy, and Tech-enabled Behavioral Health.
Following the consummation of the transactions, UpHealth will have agreements to deliver digital healthcare in more than 10 countries globally.
These various companies are expected to generate approximately $115M in revenue and over $13M of EBITDA in 2020 and following the combination, UpHealth expects to generate over $190M in revenue and $24M in EBITDA in 2021.
The business combinations were unanimously approved by the boards of directors of all parties, valuing the combined company at a combined pro forma enterprise value of approximately $1.35B.
The proposed business combinations are expected to be completed in Q1 2021, subject to, among other things, the approval by GigCapital2 stockholders, regulatory approvals, and the satisfaction or waiver of other customary closing conditions.
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 down 2 to 310 rigs, breaking the nine-week string of gains
Baker Hughes reports that the U.S. rig count is down 2 from last week to 310 with oil rigs down 5 to 231, gas rigs up 3 to 76, and miscellaneous rigs unchanged at 3.
Baker Hughes has been reporting weekly rig counts for more than 50 years
The U.S. Rig Count is down 493 rigs from last year’s count of 803, with oil rigs down 440, gas rigs down 53 and miscellaneous rigs unchanged at 3.
The U.S. Offshore Rig Count is down 1 to 12, down 10 year-over-year. The Canada Rig Count is up 12 from last week to 101, with oil rigs up 3 to 42, gas rigs up 9 to 59.
Rig Counts Fall – See Stockwinners.com Market Radar to read more
The Canada Rig Count is down 36 rigs from last year’s count of 137, with oil rigs down 44, gas rigs up 8.
Brent crude is up $0.50 to $44.70 per barrel. West Texas Intermediate (WTI) crude is up $0.29 to $42.18 per barrel.
Gasoline last traded at $1.17 per gallon, up one cent.
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.
Marvell Technology Group (MRVL) and Inphi Corporation (IPHI) announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Marvell will acquire Inphi in a cash and stock transaction.
Israel’s Marvell buys rival Inphi Corp.
In conjunction with the transaction, Marvell intends to reorganize so that the combined company will be domiciled in the United States, creating a U.S. semiconductor powerhouse with an enterprise value of approximately $40B.
Under the terms of the definitive agreement, the transaction consideration will consist of $66 in cash and 2.323 shares of stock of the combined company for each Inphi share.
Inphi sold to Marvell
Upon closing of the transaction, Marvell shareholders will own approximately 83% of the combined company and Inphi stockholders will own approximately 17% of the combined company.
Marvell intends to finance the transaction with cash on hand, and additional financing. Marvell has obtained debt financing commitments from JPMorgan Chase Bank, N.A.
The transaction is not subject to any financing condition and is expected to close by the second half of calendar 2021, subject to the approval of Marvell shareholders and Inphi stockholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.
“Our acquisition of Inphi will fuel Marvell’s leadership in the cloud and extend our 5G position over the next decade,” said Matt Murphy, president and CEO of Marvell.
“Inphi’s technologies are at the heart of cloud data center networks and they continue to extend their leadership with innovative new products, including 400G data center interconnect optical modules, which leverage their unique silicon photonics and DSP technologies.
We believe that Inphi’s growing presence with cloud customers will also lead to additional opportunities for Marvell’s DPU and ASIC products.”
“Our acquisition of Inphi will fuel Marvell’s leadership in the cloud and extend our 5G position over the next decade,” said Matt Murphy, president and CEO of Marvell.
“Inphi’s technologies are at the heart of cloud data center networks and they continue to extend their leadership with innovative new products, including 400G data center interconnect optical modules, which leverage their unique silicon photonics and DSP technologies. We believe that Inphi’s growing presence with cloud customers will also lead to additional opportunities for Marvell’s DPU and ASIC products.”
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.
Xilinx to be acquired by AMD for $35B in all-stock transaction
AMD (AMD) and Xilinx (XLNX) announced they have entered into a definitive agreement for AMD to acquire Xilinx in an all-stock transaction valued at $35B.
Under the terms of the agreement, Xilinx stockholders will receive a fixed exchange ratio of 1.7234 shares of AMD common stock for each share of Xilinx common stock they hold at the closing of the transaction.
Xilinx makes programmable logic devices
Based on the exchange ratio, this represents approximately $143 per share of Xilinx common stock. Post-closing, current AMD stockholders will own approximately 74% of the combined company on a fully diluted basis, while Xilinx stockholders will own approximately 26%.
The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
AMD expects to achieve operational efficiencies of approximately $300 million within 18 months of closing the transaction, primarily based on synergies in costs of goods sold, shared infrastructure and through streamlining common areas.
AMD goes shopping taking advantage of Intel’s troubles
The transaction has been unanimously approved by the AMD and Xilinx Boards of Directors.
The acquisition is subject to approval by AMD and Xilinx shareholders, certain regulatory approvals and other customary closing conditions.
The transaction is currently expected to close by the end of calendar year 2021.
Until close, the parties remain separate, independent companies. Dr. Lisa Su will lead the combined company as CEO. Xilinx President and CEO, Victor Peng, will join AMD as president responsible for the Xilinx business and strategic growth initiatives, effective upon closing of the transaction.
In addition, at least two Xilinx directors will join the AMD Board of Directors upon closing.
Xilinx, Inc. designs and develops programmable devices and associated technologies worldwide. The company offers integrated circuits (ICs) in the form of programmable logic devices (PLDs), such as programmable system on chips, and three dimensional ICs; adaptive compute acceleration platform; software design tools to program the PLDs; software development environments and embedded platforms; targeted reference designs; printed circuit boards; and intellectual property (IP) core licenses covering Ethernet, memory controllers, Interlaken, and peripheral component interconnect express interfaces, as well as domain-specific IP in the areas of embedded, digital signal processing and connectivity, and market-specific IP cores. XLNX closed at $114.55.
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.
ConocoPhillips, Concho Resources to combine in all-stock transaction
ConocoPhillips (COP) and Concho Resources (CXO) announced that they have entered into a definitive agreement to combine companies in an all-stock transaction.
ConocoPhillips buys Concho Resources
Under the terms of the transaction, which has been unanimously approved by the board of directors of each company, each share of Concho Resources common stock will be exchanged for a fixed ratio of 1.46 shares of ConocoPhillips common stock, representing a 15% premium to closing share prices on October 13.
The transaction will create a company with an approximately $60B enterprise value.
The combined company will hold approximately 23B barrels of oil equivalent, or BBOE resources with an average cost of supply of below $30 per barrel WTI. The transaction brings together acreage positions across the Delaware and Midland basins that also includes leading positions in the Eagle Ford and Bakken in the Lower 48 and the Montney in Canada.
The companies announced that together they expect to capture $500M of annual cost and capital savings by 2022.
The identified savings will come from lower general and administrative costs and a reduction in ConocoPhillips’ future global new ventures exploration program. This de-emphasis of ConocoPhillips’ organic resource addition program is driven by the addition of Concho’s large, low-cost resource base.
Additional supply chain, commercial and drilling and completion capital efficiency savings are not yet included in these cost-reduction estimates. ConocoPhillips will offer a compelling ordinary dividend supplemented by additional distributions as needed to meet its target distribution of greater than 30% of cash from operations.
Low oil prices and soft demand forces Concho to sell
The company seeks to maintain a strong investment-grade credit rating across price cycles. On a pro forma basis, the combined company net debt is approximately $12B as of June 30, representing an attractive leverage ratio of 1.3 at 2021 consensus commodity prices.
Upon closing, Concho’s chairman and CEO Tim Leach will join ConocoPhillips’ board of directors and executive leadership team as executive vice president and president, Lower 48. This transaction will enhance the company’s competitive position in Midland.
The transaction is subject to the approval of both ConocoPhillips and Concho stockholders, regulatory clearance and other customary closing conditions. The transaction is expected to close in the first quarter of 2021.
In the meantime, an integration planning team consisting of representatives from both companies will be formed to ensure required business processes and programs are implemented seamlessly post-closing.
In light of the pending merger, ConocoPhillips has suspended share repurchases until after the transaction closes.
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 282 rigs
Baker Hughes (BKR) reports that the U.S. rig count is up 13 from last week to 282 with oil rigs up 12 to 205, gas rigs up 1 to 74, and miscellaneous rigs unchanged at 3.
Rig Counts Rise – See Stockwinners.com Market Radar to read more
The U.S. Rig Count is down 569 rigs from last year’s count of 851, with oil rigs down 508, gas rigs down 63 and miscellaneous rigs up 2.
The U.S. Offshore Rig Count is unchanged at 14 down 8 year-over-year.
The U.S. Offshore Rig Count is unchanged at 14
The Canada Rig Count is unchanged from last week at 80, with oil rigs up 1 to 40, gas rigs down 1 to 40.
The Canada Rig Count is down 63 rigs from last year’s count of 143, with oil rigs down 58, gas rigs down 5.
Brent crude is down $0.23 to $42.94 per barrel. West Texas Intermediate (WTI)ย crudeย is down $0.12 to $40.84 per barrel.
Gasoline last traded at $1.16 per gallon down two cents.
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.
Morgan Stanley to acquire Eaton Vance for $7B in cash, stock transaction
Morgan Stanley (MS) and Eaton Vance (EV) have entered into a definitive agreement under which Morgan Stanley will acquire Eaton Vance for an equity value of approximately $7B.
Eaton Vance sold to Morgan Stanley
Morgan Stanley Investment Management, or MSIM, will be an asset manager with approximately $1.2T of AUM and over $5B of combined revenues.
The company said MSIM and Eaton Vance are highly complementary with limited overlap in investment and distribution capabilities.
Morgan Stanley buys Eaton Vance for $7B
The combination will also bring Eaton Vance’s U.S. retail distribution together with MSIM’s international distribution.
The combination will position Morgan Stanley to generate financial returns through increased scale, improved distribution, cost savings of $150M and revenue opportunities.
By financing the transaction with 50% cash, Morgan Stanley will utilize approximately 100bps of excess capital, and the firm’s common equity tier 1 ratio is expected to remain approximately 300bps above the firm’s stress capital buffer requirement of 13.2%.
Eaton Vance Corp., through its subsidiaries, engages in the creation, marketing, and management of investment funds in the United States. It also provides investment management and counseling services to institutions and individuals.ย
The transaction is expected to be breakeven to earnings per share immediately and marginally accretive thereafter, with fully phased-in cost synergies, and add approximately 100bps to return on tangible common equity.
Under the terms of the merger agreement, Eaton Vance shareholders will receive $28.25 per share in cash and 0.5833x of Morgan Stanley common stock, representing a total consideration of approximately $56.50 per share.
Based on the $56.50 per share, the aggregate consideration paid to holders of Eaton Vance’s common stock will consist of approximately 50% cash and 50% Morgan Stanley common stock.
The merger agreement also contains an election procedure allowing each Eaton Vance shareholder to seek all cash or all stock, subject to a proration and adjustment mechanism.
In addition, Eaton Vance common shareholders will receive a one-time special cash dividend of $4.25 per share to be paid pre-closing by Eaton Vance to Eaton Vance common shareholders from existing balance sheet resources.
It is anticipated that the transaction will not be taxable to Eaton Vance shareholders to the extent that they receive Morgan Stanley common stock as consideration.
The transaction has been approved by the voting trust that holds all of the voting common stock of Eaton Vance. The acquisition is subject to customary closing conditions, and is expected to close in Q2 of 2021.
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.
