Merger Arbitrage Mondays – April 5, 2010

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April 5, 2010 | Merger Arbitrage | | Author Asif

Last week was another active week on the mergers and acquisitions front with four new deals announced, two completed and one deal sweetened to the tune of $100 million. Private investor group SSI Investments bumped up its $1.1 billion or $10.80 per share bid for SkillSoft (SKIL) to $1.2 billion or $11.25 per share. Based on the closing price of $11.10 last Thursday, the spread on the deal is still 15 cents or 1.35%. Given that the deal could close by the end of May, that represents an 8.81% annualized return.

The two deals that closed were the acquisition of Zabera Systems (ZRBA) by Woodstream Corp and the acquisition of K-Tron International (KTII) by casket maker Hillenbrand (HI).

The four new deals announced include the acquisition of Bell Microproducts (BELM) by Avnet (AVT) for $7 per share, the acquisition of BWAY Holdings by Madison Dearborn for $20 per share, the acquisition of White Electronic Designs (WEDC) by Microsemi (MSCC) for $7/share and the acquisition of North American Galvanizing & Coatings (NGA) by AZZ, Inc. (AZZ) for $7.50/share. As you can see from the table below, the spread on these four deals either does not exist or in the case of BWAY Holdings, the market is willing to pay more than the $20 announced price.

  Symbol Announced Date Acquiring Company Closing Value Closing Price Last Price Closing Date Profit Annualized Profit
+ AYE 2/11/2010 FirstEnergy $8.5 billion 26.32 23.05 3/31/2011 14.19% 14.55%
+ SSE 2/23/2010 Naugatuck Valley Financial Corp $19.5 million 7.25 6.75 8/16/2010 7.41% 20.64%
+ STBK 3/18/2010 Roma Financial Corp $14.7 million 2.52 2.36 8/16/2010 6.78% 18.89%
+ PINN 2/24/2010 Investor Group lead by Scotia Waterous (USA) $11 million 0.34 0.3202 5/17/2010 6.18% 53.74%
+ SWWC 3/3/2010 Institutional Investors $275 million 11 10.39 5/17/2010 5.87% 51.02%
+ BNE 2/24/2010 RR Donnelley $481 million 11.5 11.09 9/30/2010 3.70% 7.71%
+ SII 2/19/2010 Schlumberger $7.5 billion 44.98 43.59 9/30/2010 3.19% 6.65%
+ MAM 3/12/2010 Emera Inc. $75.7 million 45 43.75 12/31/2010 2.86% 3.92%
+ IUSA 3/8/2010 CCMP $460 million 8 7.83 6/30/2010 2.17% 9.32%
+ ORCD 3/16/2010 eMusic $12.77 million 2.05 2.01 8/16/2010 1.99% 5.54%
+ RISK 3/1/2010 MSCI $1.55 billion 22.92 22.6 7/16/2010 1.42% 5.12%
+ SKIL 2/12/2010 consortium of private equity funds $1.2 billion 11.25 11.1 5/31/2010 1.35% 8.81%
+ MIL 3/1/2010 Merck $6 billion 107 105.94 9/30/2010 1.00% 2.09%
+ ADG 1/19/2010 Chemring Group Plc $59 million 7.25 7.18 4/19/2010 0.97%  
+ RBI 3/15/2010 affiliate of Oncap Management Partners L.P.   13.55 13.43 8/16/10 0.89% 2.49%
+ PRPX 2/17/2010 L.B. Foster Co. $112 million 11.71 11.62 6/30/2010 0.77% 3.33%
+ PIII 2/18/2010 Lineage $16.7 million 5.86 5.8201 5/17/2010 0.69% 5.96%
+ TUTR 3/26/2010 Thoma Brava $141 million 5.6 5.57 7/31/2010 0.54% 1.69%
+ CXG 3/22/2010 Consol Energy Inc. $363 million 38.25 38.05 5/5/2010 0.53% 6.40%
+ CITP 2/2/2010 Manpower $375.8 million 17.65 17.59 4/2/2010 0.34% -41.50%
+ TRA 3/12/2010 CF Industries Holdings, Inc. $4.7 billion 45.96 45.81 4/12/2010 0.33% 17.07%
+ NGA 4/1/2010 AZZ Inc. $125.6 million 7.5 7.49 8/31/2010 0.13% 0.33%
+ FACT 3/9/2010 Abbot $450 million 27 26.98 5/17/2010 0.07% 0.64%
+ WEDC 3/30/2010 Microsemi Corporation $100 million 7 7 6/27/2010 0.00% 0.00%
+ BELM 3/29/2010 Avnet $252 million 7 7 6/30/2010 0.00% 0.00%
+ CFL 1/18/2010 Tyco International $2.9 billion 42.5 42.65 6/26/2010 -0.35% -1.58%
+ CKR 3/1/2010 Thomas H. Lee $928 million 11.05 11.11 5/17/2010 -0.54% -4.69%
+ LGN 1/22/2010 Lone Star Funds $270 million 2.5 2.52 5/17/2010 -0.79% -6.90%
+ ZNT 2/18/2010 Fairfax Financial Holdings $I.4 billion 38 38.34 5/17/2010 -0.89% -7.71%
+ RCNI 3/5/2010 Abry $1.2 billion 15 15.15 9/30/2010 -0.99% -2.07%
+ TWLL 3/22/2010 Intersil Corp. $400 million 18.5 18.71 5/17/2010 -1.12% -9.75%
+ CHRD 3/15/2010 Pegasystems $161.5 million 5 5.08 5/17/2010 -1.57% -13.69%
+ BWY 3/29/2010 Madison Dearborn Partners, LLC ("MDP") $915 million 20 20.34 8/16/2010 -1.67% -4.66%
+ CCE 2/25/2010 The Coca-Cola Company $12.3 billion   27.89 10/1/2010 -100% -207.39%



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