All posts written by Asif

Merger Arbitrage Mondays – July 26, 2010

July 25, 2010 | Merger Arbitrage | Author Asif

The activity on the Merger Arbitrage front dropped a little last week with three new deals announced and two deals closing.

The new deals include the acquisition of AmeriCredit Corporation (ACF) by General Motors at $24.50 per share in cash, the acquisition of Cypress Bioscience (CYPB) by hedge fund Ramius at $4.00 per share in cash and the acquisition of ATC Technology (ATAC) by Genco at $25 per share in cash. We have not listed the acquisition of CYPB by Ramius in the table below because the deal is yet to be approved by the Cypress board.

The deals that closed include the acquisition of Arena Resources (ARD) by SandRidge Energy on July 19, 2010 and the acquisition of SonicWall (SNWL) by an investment group led by private equity investment firm Thoma Bravo LLC on July 23, 2010. The tender offers for Santander Bancorp (SBP) and American Italian Pasta Company (AIPC) are now complete and those deals are expected to close shortly.

	Symbol	Announced Date	Acquiring Company	Closing Value	Closing Price	Last Price	Closing Date	Profit	Annu. Profit
+	WX	04/26/2010	Charles River Laboratories (CRL)	$1.6 billion	$20.54	$15.74	12/31/2010	30.48%	70.41%
Details of Wuxi Pharmatech (Cayman) Inc. A Expected to close by the end of the year for a closing values of $1.6bn. It is a cash and stock transaction in which WuXi PharmaTech ADS holders will receive $11.25 in cash and $10.00 of Charles River common stock determined by an exchange ratio. This exchange ratio will be determined by dividing $10.00 by the weighted average Charles River common stock closing price as reported on the New York Stock Exchange for the 20-day trading period ending on the second business day prior to closing (Charles River Average Price). However, if the Charles River Average Price is equal to or greater than $43.1726, then the exchange ratio will be fixed at 0.2316, and if the Charles River Average Price is equal to or less than $37.1486, then the exchange ratio will be fixed at 0.2692.
+	EMMS	05/25/2010	JS Acquisition and Alden Global Capital (N/A)	$3 billion	$2.40	$1.97	09/30/2010	21.83%	120.71%
Details of Emmis Communications Corporatio Expected to close in the third quarter of 2010 for a closing value of over $3bn. On the completion of the merger, Emmis Communications shareholders will receive $2.40 per share in cash.
+	TLCR	06/07/2010	Grifols (GRF.MC)	$3.4 billion	$25.89	$21.66	12/31/2010	19.53%	45.11%
Details of Talecris Expected to close by the end of the year for a closing value of $3.4 billion. On the completion of the merger Grifols will pay $19 in cash and 0.641 newly issued, nonvoting shares for each share of Talecris.
+	SSE	02/23/2010	Naugatuck Valley Financial Corp (NVSL)	$19.5 million	$7.25	$6.35	08/16/2010	14.17%	246.34%
Details of Southern Connecticut Bancorp In Expected to close by the third calendar quarter of 2010, for a closing value of $19.5mn @ $7.25/share. The Cash/stock election is subject to proration
+	AYE	02/11/2010	FirstEnergy (FE)	$8.5 billion	$25.24	$23.08	03/31/2011	9.36%	13.77%
Details of Allegheny Energy, Inc. Common S Expected to close by March 31, 2011 for a closing value $8.5bn. It is a stock based transaction @ 0.667 share of FE
+	BGH	06/11/2010	Buckeye Partners LP (BPL)	$1.14 billion	$44.53	$41.54	12/31/2010	7.19%	16.62%
Details of Buckeye GP Holdings Expected to close in the fourth quarter of 2010 for a closing value of $1.14 billion. Under the deal, for each Buckeye GP unit, holders will get 0.705 Buckeye Partners units.
+	ATBC	05/10/2010	Jacksonville Bancorp (JAXB)	N/A	$2.45	$2.31	09/30/2010	6.06%	33.52%
Details of Atlantic BancGroup Inc Expected to close in the third quarter of 2010. If the merger is completed, Atlantic BancGroup shareholders will receive 0.2 shares of Jacksonville Bancorp common stock for each share of Atlantic BancGroup common stock held, plus up to approximately $0.65 per share in cash, subject to the qualifying sale of certain Atlantic BancGroup assets.
+	PINN	02/24/2010	Investor Group lead by Scotia Waterous (USA) (N/A)	$11 million	$0.34	$0.321	08/21/2010	5.92%	83.09%
Details of Pinnacle Gas Resources, Inc. Expected to close by the second quarter of 2010 for a closing value of $11mn. It is a cash deal @ $0.34 per share
+	Q	04/22/2010	Century Link (CTL)	$10.6 billion	$5.92	$5.64	04/21/2011	4.91%	6.67%
Details of Qwest Communications Internatio Expected to close in the first half of 2011for a value of $10.6bn. Under the terms of the agreement, Qwest shareholders will receive 0.1664 CenturyLink shares for each share of Qwest common stock they own at closing.
+	TTIL	06/09/2010	Teoco Corp. (N/A)	$58 million	$3.00	$2.88	09/30/2010	4.17%	23.04%
Details of TTI Telecom Expected to close in the third quarter of 2010 for a closing value of $58 million. On the completion of the merger, TTIL shareholders will receive $3 per share in cash.
+	ALOY	06/24/2010	ZelnickMedia (N/A)	$126.5 million	$9.80	$9.43	12/31/2010	3.92%	9.06%
Details of Alloy Expected to close in the fourth quarter of 2010 for a closing value of $126.5 million. On the completion of the merger, shareholders of Alloy Inc. will receive $9.80 per share in cash.
+	ATAC	07/19/2010	Genco Distribution System Inc. (N/A)	$513 million	$25.00	$24.16	12/31/2010	3.48%	8.03%
Details of ATC Technology Expected to close by the fourth quarter of 2010 for a closing value of $513 million. On the completion of the merger, ATC shareholders will receive $25 per share in cash.
+	PRPX	02/17/2010	L.B. Foster Co. (FSTR)	$112 million	$11.71	$11.35	08/31/2010	3.17%	32.16%
Details of Portec Rail Products, Inc. Expected to close by the end of June 2010 for a closing value of $112mn. The cash deal is @ $11.71 per share
+	TSFG	05/17/2010	TD Bank Financial Group (N/A)	$61 million	$0.28	$0.2716	09/30/2010	3.09%	17.10%
Details of The South Financial Group Inc. Expected to close by the third quarter of 2010 for a closing value of $61mn. On the completion of the merger, The South Financial Group shareholders will receive either $0.28 in cash or 0.004 shares of TD Bank Financial Group common stock per The South Financial Group common share held.
+	ODSY	05/24/2010	Gentiva Health Services (GTIV)	$1.0 billion	$27.00	$26.23	09/30/2010	2.94%	16.23%
Details of Odyssey Healthcare, Inc. Expected to close in the third quarter of 2010 for a closing value of $1.0bn. On the completion of the merger, Odyssey HealthCare shareholders will receive $27.00 per share in cash.
+	PMACA	06/10/2010	Old Republic International (ORI)	$228 million	$6.95	$6.75	09/30/2010	2.91%	16.10%
Details of PMA Capital Expected to close in the third quarter of 2010 for a closing value of $228 million. As part of the agreement, Old Republic will issue 0.55 shares of its common stock in exchange for each outstanding common share of PMA.
+	GLG	05/17/2010	Man Group (N/A)	$1.6 billion	$4.50	$4.38	09/30/2010	2.74%	15.15%
Details of GLG Partners Inc Common Stock Expected to close by the third quarter of 2010 for a closing value of approximately $1.6bn. On the completion of the merger, GLG Partners shareholders will receive $4.50 per share in cash.
+	HEW	07/12/2010	Aon Corp (AON)	$4.9 billion	$48.91	$47.63	11/15/2010	2.68%	8.74%
Details of Hewitt Associates Expected to close by mid-November 2010, Aon Corp plans to acquire Hewitt Associates for $4.9 billion. The deal is a cash plus stock deal worth $50 at the time of announcement. Hewitt shareholders will receive $25.61 in cash and 0.6362 shares of AON.
+	ECLP	06/09/2010	Allscripts-Misys Healthcare (MDRX)	$1.3 billion	$19.43	$18.93	11/15/2010	2.63%	8.57%
Details of Eclipsys Corporation Expected to close in the next four or six months from June 2010 for a closing value of $1.3 billion. On the completion of the merger, Eclipsys shareholders will receive 1.2 shares of Allscripts.
+	WMZ	05/24/2010	Williams Partners L.P. (WPZ)		$35.48	$34.57	09/30/2010	2.63%	14.52%
Details of Williams Pipeline Partners LP C Expected to close in the third quarter of 2010. On the completion of the merger, Williams Pipeline Partners shareholders will receive 0.7584 shares of Williams Partners common stock per share held.
+	VETS	06/02/2010	VCA Antech Inc (WOOF)	$41.25 million	$0.34	$0.3325	09/30/2010	2.26%	12.47%
Details of PET DRx Corp Expected to close by the third quarter of 2010 for a closing value of $41.25mn. On the completion of the mergerPet DRx shareholders are expected to receive $0.34 – $0.36 per share in cash.
+	PSYS	05/17/2010	Universal Health (N/A)	$3.1 billion	$33.75	$33.07	12/31/2010	2.06%	4.75%
Details of Psychiatric Solutions, Inc. Expected to close by the fourth quarter of 2010 for a closing value of $3.1bn. On the completion of the merger, Psychiatric Solutions shareholders will receive $33.75 per share in cash.
+	EFJI	05/17/2010	Francisco Partners (N/A)	N/A	$1.50	$1.47	09/30/2010	2.04%	11.29%
Details of EFJohnson Technologies, Inc Expected to close by the third quarter of 2010. On the completion of the merger, EF Johnson Technologies shareholders will receive $1.05 per share in cash. The deal was amended on June 21, 2010 and the acquisition price increased by 42% to $1.50.
+	ACF	07/22/2010	General Motors Co. (N/A)	$3.5 billion	$24.50	$24.01	12/31/2010	2.04%	4.71%
Details of AmeriCredit Corp. Expected to close in the fourth quarter of 2010, for a closing value of $3.5 billion. On the completion of the merger, ACF shareholders will receive $24.50 per share in cash.
+	OMNI	06/04/2010	Wellspring Capital Management (N/A)	$122 million	$2.75	$2.70	11/15/2010	1.85%	6.04%
Details of OMNI Energy Services Corp. Expected to close in the second half of 2010 for a closing value of $122mn. On the completion of the merger OMNI Energy Services shareholders will receive $2.75 per share in cash.
+	SMTB	07/15/2010	People's United Financial Inc. (PBCT)	$60 million	$4.01	$3.941	12/31/2010	1.73%	3.99%
Details of Smithtown Bancorp Inc Expected to close in the fourth quarter of 2010, for a closing value of $60 million. On the completion of the merger, Smithtown Bancorp shareholders will receive 0.1430 shares of People's United common stock and $2.00 in cash.
+	WAIN	06/29/2010	Eastern Bank (N/A)	$163 million	$19.00	$18.6901	12/31/2010	1.66%	3.83%
Details of Wainwright Bank & Trust Expected to close in the fourth quarter of 2010 for a closing value of $163 million. On the completion of the merger, Eastern Bank will pay $19 in cash for each share of Wainwright Bank.
+	DIVX	06/02/2010	Sonic Solutions (SNIC)	$323 million	$8.06	$7.93	09/30/2010	1.61%	8.88%
Details of DivX Expected to close by the third quarter of 2010 for a cosing value of $323mn. On the completion of the merger, DivX shareholders will receive $3.75 in cash and 0.514 shares of Sonic Solutions common stock for each share of DivX they hold.
+	ADCT	07/13/2010	Tyco Electronics (TEL)	$1.24 billion	$12.75	$12.56	12/31/2010	1.51%	3.49%
Details of ADC Telecommunications Inc Expected to close in the fourth quarter of 2010, for a closing value of $1.24 billion. On the completion of the merger, ADC Telecommunications shareholders will receive $12.75 per share in cash
+	NTY	07/15/2010	The Carlyle Group (N/A)	$3.8 billion	$55.00	$54.19	12/31/2010	1.49%	3.45%
Details of NBTY Inc. Expected to close by the end of 2010 for a closing value of $3.8 billion. On the completion of the merger, NBTY shareholders will receive $55 per share in cash.
+	SWWC	03/03/2010	Institutional Investors (N/A)	$275 million	$11.00	$10.84	03/31/2011	1.48%	2.17%
Details of Southwest Water Company Expected to close by 3/31/2011 for a closing value of $275 million. It is a cash deal @ $11.00 per share
+	MIR	04/12/2010	RRI Energy In. (RRI)	$1.6 billion	$11.94	$11.77	12/31/2010	1.40%	3.25%
Details of Mirant Corp Common Stock Expected to close by the end of the year 2010 for a value of $1.6bn. Mirant Corp. will combine with RRI Energy Inc. in a stock-deal to form GenOn Energy. Mirant stockholders will get about 2.84 RRI common shares for each Mirant share they own.
+	NYM	07/15/2010	ProSight (N/A)	$230 million	$25.75	$25.40	12/31/2010	1.38%	3.18%
Details of NYMagic Expected to close in the fourth quarter of 2010 for a closing value of $230 million. On the completion of the merger, NYMagic shareholders will receive $25.75 per share in cash.
+	BNE	02/24/2010	RR Donnelley (RRD)	$481 million	$11.50	$11.35	09/30/2010	1.32%	7.31%
Details of Bowne & Co., Inc. Common Stock Expected to close by the second half of 2010 for a closing value of $481mn. It is a cash deal @ $11.50 per share
+	ME	04/15/2010	Apache (APA)	$2.7 billion	$23.61	$23.33	09/30/2010	1.22%	6.74%
Details of Mariner Energy, Inc. Mariner En Expected to close by the third quarter of 2010 for a value of $2.7bn. Under the cash and stock deal, Mariner stockholders will receive cash of $7.80 and 0.17043 of a share of Apache common stock in exchange for each share of Mariner common stock.
+	STBK	03/18/2010	Roma Financial Corp (ROMA)	$14.7 million	$2.52	$2.49	08/16/2010	1.20%	20.94%
Details of Sterling Banks, Inc. Expected to close in the third quarter of 2010 for a closing value of $14.7 million. The cash deal is @ $2.52 per share
+	MAM	03/12/2010	Emera Inc (N/A)	$75.7 million	$45.00	$44.48	12/31/2010	1.17%	2.70%
Details of Maine & Maritimes Corporation C Expected to close by the end of 2010 for a closing value of $75.7 million. The cash deal is @ $45 per share
+	BSMD	05/13/2010	Merit Medical Systems (MMSI)	$96 million	$4.38	$4.33	09/30/2010	1.15%	6.39%
Details of BioSphere Medical, Inc. Expected to close in the third quarter of 2010 for a closing value of $96mn.If the merger is completed, BioSphere Medical shareholders will receive $4.38 per share in cash.
+	PFWD	04/16/2010	Oracle Corp. (ORCL)	$685 million	$17.00	$16.82	06/30/2010	1.07%	0.00%
Details of Phase Forward Incorporated Expected to close in the middle of the year 2010 for a value of $685mn. Oracle is paying $17 per share in cash.
+	LSBX	07/15/2010	People's United Financial Inc. (PBCT)	$96 million	$21.00	$20.79	12/31/2010	1.01%	2.33%
Details of LSB Corporation Expected to close in the fourth quarter of 2010 for a closing value of $96 million. On the completion of the merger, LSBX shareholders will receive $21 per share in cash.
+	QUOT	06/11/2010	LQ Acquisition (N/A)	$19 million	$4.00	$3.96	09/30/2010	1.01%	5.59%
Details of Life Quotes Expected to close in the third quarter of 2010 for a closing value of $19 million. On the completion of the merger Life Quotes shareholders will receive $4.00 per share in cash.
+	ACAP	07/08/2010	The Doctors Company (N/A)	$386 million	$41.50	$41.11	12/31/2010	0.95%	2.19%
Details of American Physicians Capital Inc. Expected to close in the fourth quarter of 2010 for a closing value of $386 million. On the completion of the merger, American Physicians Capital shareholders will receive $41.50 per share in cash.
+	CRN	04/19/2010	GeoGroup (GEO)	$685 million	$28.17	$27.97	09/30/2010	0.72%	3.97%
Details of Cornell Corrections, Inc. Commo Expected to close in the third quarter of 2010 at an estimated enterprise value of $685 million based on the closing prices of both companies
+	SII	02/19/2010	Schlumberger (SLB)	$7.5 billion	$41.34	$41.06	09/30/2010	0.69%	3.81%
Details of Smith International, Inc. Commo Expected to close by the second half of 2010. It is a stock-for-stock merger @ 0.6966 shares of SLB / $42.96 per SII share
+	WEL	04/09/2010	Halliburton Company (HAL)	$240 million	$3.00	$2.98	09/30/2010	0.67%	3.71%
Details of Boots and Coots, Inc. Common St Expected to close in the summer of 2010 for a value of $240mn. The $3 cash & stock deal consists of $1.73 in cash and $1.27 in Halliburton stock.
+	MEND	07/12/2010	Johnson & Johnson (JNJ)	$480 million	$23.40	$23.25	09/30/2010	0.65%	3.57%
Details of Micrus Endovascular Expected to close in the second half of 2010, JNJ plans to acquire MEND in an all cash deal valued at $480 million. MEND shareholders will receive $23.40 in cash should the deal complete.
+	RBI	03/15/2010	affiliate of Oncap Management Partners L.P. (N/A)		$13.55	$13.48	08/16/2010	0.52%	9.03%
Details of Sport Supply Group, Inc Expected to close in the second or third quarter of 2010. ONCAP has the unilateral option to terminate the merger agreement by paying to Sport Supply Group a termination fee of either $6,000,000 or $10,000,000, depending on whether financing is available to ONCAP. It is a cash deal @ $13.55
+	MDNU	06/11/2010	Danone (N/A)	$62.3 million	$4.00	$3.98	09/30/2010	0.50%	2.78%
Details of Medical Nutrition USA Expected to close in the third quarter of 2010 for a closing value of $62.3 million. On the completion of the merger, shareholders of Medical Nutrition USA will receive $4 per share in cash.
+	ORCD	03/16/2010	eMusic (N/A)	$12.77 million	$2.05	$2.04	08/16/2010	0.49%	8.52%
Details of The Orchard Enterprises, Inc Expected to close by the third quarter of 2010 for $12.7 million @ $2.05 per share.
+	NADX	04/05/2010	GDC Holdings Inc. (N/A)	$100 million	$17.00	$16.93	09/30/2010	0.41%	2.29%
Details of National Dentex Corporation Expected to close at the end of the quarter ending June 30 for a value of $100mn. The deal is @ $17.00 per share in cash.
+	RCNI	03/05/2010	ABRY Partners (N/A)	$536 million	$15.00	$14.94	09/30/2010	0.40%	2.22%
Details of RCN Corp. Expected to close by the Second half 2010 for a closing value of $536mn. It is a cash deal @ $15.00 per share
+	GNA	06/02/2010	Gerdau (GGB)	$1.7 billion	$11.00	$10.96	08/31/2010	0.36%	3.70%
Details of Gerdau Ameristeel Corporation Expected to close by August 31, 2010 for a closing value of $1.7 billion. On the completion of the merger Gerdau Ameristeel shareholders will receive $11.00 per share in cash.
+	VRAD	05/17/2010	Providence Equity (N/A)	$294 million	$17.25	$17.20	09/30/2010	0.29%	1.61%
Details of Virtual Radiologic Corporation Expected to close by the third quarter of 2010 for a closing value of $294mn. On the completion of the merger, Virtual Radiologic shareholders will receive $17.25 per share in cash.
+	VTIV	05/06/2010	Thomas H. Lee Partners (N/A)	$1.1 billion	$26.00	$25.93	09/30/2010	0.27%	1.49%
Details of inVentiv Health, Inc. Expected to close by the third quarter of 2010 for a closing value of approx $1.1bn. Under the terms of the agreement, which has been approved by inVentiv’s board of directors, inVentiv shareholders will receive $26.00 in cash for each share of VTIV common stock they hold.
+	SXE	05/07/2010	CGI Group (N/A)	$904 million	$37.50	$37.40	09/30/2010	0.27%	1.48%
Details of Stanley, Inc. Common Stock Expected to close during the fall of 2010 for a closing value of $904mn. CGI will pay shareholders $37.50 for each share of Stanley.
+	ATSI	04/29/2010	Medtronic (MDT)	$350 million	$4.00	$3.99	09/30/2010	0.25%	1.39%
Details of ATS Medical, Inc. Expected to close by September 30 for a value of $350mn. Medtronic is offering ATS Medical $4 per share
+	SMTS	06/16/2010	Covidien (COV)	$299 million	$25.00	$24.97	07/31/2010	0.12%	8.77%
Details of Somanetics Corp. Expected to close on July 21, 2010 for a closing value of $299 million. On the completion of the merger Somanetics shareholders will receive $25 per share in cash.
+	IDC	05/04/2010	Silver Lake & Warburg Pincus (N/A)	$3.4 billion	$33.86	$33.82	09/30/2010	0.12%	0.65%
Details of Interactive Data Corporation Co Expected to close by the third quarter of 2010 for a cosing value of $3.4bn. According to the deal, Interactive Data shareholders will receive $33.86 per share in cash.
+	SY	05/12/2010	SAP (SAP)	$5.8 billion	$65.00	$64.96	09/30/2010	0.06%	0.34%
Details of Sybase, Inc. Common Stock Expected to close in the third quarter of 2010 for a closing value of $5.8bn. If the merger is completed, Sybase shareholders will receive $65.00 per share in cash.
+	STST	06/30/2010	Boeing (BA)	$775 million	$34.50	$34.49	09/30/2010	0.03%	0.16%
Details of Argon ST Expected to close by the end of the second quarter for a closing value of $755 million.On the completion of the merger, stockholders of Argon ST will receive $34.50 per share in cash.
+	VIRL	06/10/2010	Synopsys (SNPS)	$315 million	$12.00	$12.00	12/31/2010	0.00%	0.00%
Details of Virage Logic Corp Expected to close in the fourth quarter of 2010 for a closing value of $315 million. The deal values Virage at $12 per share.
+	AIPC	06/21/2010	Ralcorp Holdings (RAH)	$1.2 billion	$53.00	$53.01	09/30/2010	-0.02%	-0.10%
Details of American Italian Pasta Expected to close during Ralcorp Holding's fourth fiscal quarter ending Sept. 30 for a closing value of $1.2 billion. On the completion of the merger, Ralcorp Holdings will pay shareholders of American Italian Pasta $53 per share in cash
+	CAL	05/03/2010	United (UAUA)	$1.2 billion	$24.11	$24.25	12/31/2010	-0.59%	-1.35%
Details of Continental Airlines, Inc. Comm Expected to close by the end of 2010 for a closing value of approximately $1.2bn. In the merger, Continental shareholders will receive 1.05 shares of United common stock for each Continental common share they own.
+	SBP	06/24/2010	ABLASA (N/A)	N/A	$12.69	$12.77	07/29/2010	-0.63%	-76.22%
Details of Santander Bancorp Expected to close by July 29, 2010 unless extended. On the completion of the merger Santander BanCorp shareholders will receive $12.69 per share in cash.
+	NGA	04/01/2010	AZZ Inc. (AZZ)	$125.6 million	$7.50	$7.56	08/31/2010	-0.79%	-8.05%
Details of North American Galvanizing & Co Expected to close by the end of AZZ’s fiscal second quarter, Aug. 31for a value of $125.6 million. AZZ plans a cash tender offer for NAGC of $7.50 per share
+	VRX	06/21/2010	Biovail Corporation (BVF)	$3.3 billion	$54.70	$55.32	12/31/2010	-1.12%	-2.58%
Details of Valeant Pharmaceuticals Expected to close by the end of 2010 for a closing value of roughly $3.3 billion. Valeant stockholders will get a one-time special cash dividend of $16.77 per share and 1.7809 shares of Biovail common stock. The combined company will pay an additional $1/share dividend to all stockholders of the new entity.
+	CPII	05/10/2010	Comtech (CMTL)	$472.3 million	$13.90	$14.08	09/30/2010	-1.25%	-6.89%
Details of CPI International, Inc. Expected to close in the third quarter of 2010 for a closing alue of $472.3mn. If the merger is completed, CPI International shareholders will receive a combination of $9.00 in cash plus a fraction of Comtech common stock equal to $8.10 divided by the average closing price of Comtech common stock over a specified period of time prior to closing, provided that the fraction shall not be greater than 0.2382 nor less than 0.2132.
+	ABII	06/30/2010	Celgene (CELG)	$2.9 billion	$71.80	$74.42	12/31/2010	-3.51%	-8.12%
Details of Abraxis Bioscience Inc. Expected to close in the fourth quarter of 2010 for a closing value of $2.9 billion. Under terms of the deal, shareholders of Abraxis will receive $58 and 0.2617 shares of Celgene for each Abraxis share they own.
+	BXC	07/22/2010	Cerberus Capital Management (N/A)	$111.1 million	$3.40	$3.91	12/31/2010	-13.04%	-30.13%
Details of BlueLinx Holdings Inc. Expected to close in the fourth quarter of 2010 for a closing value of $111.1 million. On the completion of the merger, BXC shareholders will receive $3.40 per share in cash.
+	DTG	04/26/2010	Hertz (HTZ)	$1.3 billion	$39.88	$47.57	12/31/2010	-16.17%	-37.35%
Details of Dollar Thrifty Automotive Group Expected to close by the end of the year for a value of $1.3 billion. The transaction values Dollar Thrifty stock at approximately $41.00 per share. the $41.00 per share purchase price is comprised of 80% cash consideration and 20% stock consideration. The cash portion will be paid in two components; (1) a $200 million special cash dividend representing approximately $6.88 per share, to be paid by Dollar Thrifty immediately prior to the transaction closing and (2) $25.92 per share to be paid by Hertz at the closing. The stock is at a fixed exchange ratio of 0.6366 per share, based upon a Hertz common stock closing price of $12.88 per share on April 23, 2010.
+	MCCC	06/01/2010	Chief Executive Rocco Commisso (N/A)	$590 million	$6.00	$7.26	N/A	-17.36%	0.00%
Details of Mediacom Communications Corporation
+	CCE	02/25/2010	The Coca-Cola Company (KO)	$12.3 billion	N/A	$28.51	10/01/2010	N/A	N/A
Details of Coca-Cola Enterprises, Inc. Com Expected to close by October 1, 2010 for a closing value of $12.3 billion. The deal includes $10 per share + a share in a new bottling company

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Insider Weekends – July 23, 2010

July 25, 2010 | Insider Buying | Author Asif

Welcome to the seventh edition of Insider Weekends. Insider buying fell more than 50% last week when compared to the week prior and is now at its lowest level since we started collecting this information in the last week of April. Insiders purchased just $3.4 million of their stock last week while selling picked up pace with insiders selling $335.55 million worth of stock.

Sell/Buy Ratio:

The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider buying in that week. The adjusted ratio for last week spiked to 98.64. In other words, insiders sold almost 99 times as much stock as they purchased. A large part of this was driven by sales of AutoZone by famous hedge fund manager Edward (Eddie) Lampert and his fund ESL Partners. While we normally exclude fund sales, Mr. Lampert also happens to be a 10% owner and sold a number of these shares directly. Removing the AutoZone sales drops the ratio to 51.13.

The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 49.07. We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.

Notable Insider Buys:

1. Agilysys Inc. (AGYS): $7.67

Director Andrew Cueva acquired 116,152 shares of this IT services provider through his fund MAK Capital, paying $7.16 per share for a total amount of $831,560. This is the fifth week Agilysys has made our list.

P/E: 49.81	Forward P/E: 22.56	Industry P/E: 21.17
P/S: 0.26	Price/Book: 0.84	EV/EBITDA: 16.81
Market Cap: $175.92M	Avg. Daily Volume: 175,664	52 Week Range: $4.4 – $12.5

2. FTI Consulting, Inc. (FCN): $35.8

Director James Crownover acquired 1,000 shares of this business advisory company, paying $33.8 per share for a total amount of $33,795. EVP & Chief Operating Officer Dominic Dinapoli also acquired 5,000 shares, paying $34.61 per share for a total amount of $173,045. Director Gerard E Holthaus acquired 2,850 shares, paying $35.05 per share for a total amount of $99,879. FTI Consulting was on our list last week as well after the CEO and Chairman of the Board both acquires shares.

P/E: 14.78	Forward P/E: 12.39	Industry P/E: 20.78
P/S: 1.18	Price/Book: 1.48	EV/EBITDA: 6.77
Market Cap: $1.68B	Avg. Daily Volume: 959,473	52 Week Range: $30.78 – $56.41

3. General Mills Inc. (GIS): $35.52

EVP, Gen Counsel, Chief Compliance & Risk, Roderick A Palmore acquired 6,747 shares of this branded food manufacturer, paying $35.6 per share for a total amount of $240,193.

P/E: 15.86	Forward P/E: 13.11	Industry P/E: 15.94
P/S: 1.56	Price/Book: 4.3	EV/EBITDA: 9.39
Market Cap: $23.13B	Avg. Daily Volume: 6,506,720	52 Week Range: $28.55 – $38.98

4. Piper Jaffray Companies (PJC): $29.6

Chairman & CEO Andres S Duff also acquired 5,000 shares of this investment bank and asset management company, paying $28.19 per share for a total amount of $140,942. Chief Administrative Officer Ronald T Firebaugh acquired 3,500 shares, paying $28.09 for a total amount of $98,315.

P/E: 16.92	Forward P/E: 11.94	Industry P/E: 17.1
P/S: 1.19	Price/Book: 0.54	EV/EBITDA: N/A
Market Cap: $614.44M	Avg. Daily Volume: 197,050	52 Week Range: $26.84 – $57.8

5. H&R Block, Inc. (HRB): $15.23

Director Christianna Wood acquired 9,713 shares of this tax preparation company, paying $14.82 per share for a total amount of $143,932.

P/E: 10.64	Forward P/E: 8.46	Industry P/E: 13.18
P/S: 1.26	Price/Book: 3.38	EV/EBITDA: 4.33
Market Cap: $4.92B	Avg. Daily Volume: 4,734,430	52 Week Range: $13.44 – $23.23

Notable Insider Sales:

1. AutoZone Inc. (AZO): $207.00

Director William Crowley sold 2,151 shares of this auto parts retailer both directly and through his company Tynan LLC, at an average price of $207.13, generating $445,532 from the sale. 10% owner Edward Lampert (of Sears Holdings fame) sold 778,195 shares both directly and through his fund ESL Partners, at an average price of $207.13, generating $161.19 million from the sale.

P/E: 14.87	Forward P/E: 12.55	Industry P/E: 19.89
P/S: 1.36	Price/Book: N/A	EV/EBITDA: 8.49
Market Cap: $9.73B	Avg. Daily Volume: 641,356	52 Week Range: $135.13 – $208.2

2. Apollo Group Inc. (APOL): $49.27

Vice Chairman of the Board Peter Sperling sold 100,000 shares of this for-profit education company (Apollo is the parent company of the widely recognized University of Phoenix) for $47.67, generating $4.77 million from the sale. Apollo was also on our list last week when Mr. Sperling sold 250,000 shares for a total amount of $10.95 million.

P/E: 12.63	Forward P/E: 8.8	Industry P/E: 19.01
P/S: 1.44	Price/Book: 4.93	EV/EBITDA: 4.57
Market Cap: $7.27B	Avg. Daily Volume: 3,688,950	52 Week Range: $41.45 – $76.86

3. Emergent BioSolutions, Inc. (EBS): $19.23

CEO and Chairman Fuad El-Hibri sold 233,333 shares of this biotech company for an average selling price of $18.43, generating $4.3 million from the sale.

P/E: 26.75	Forward P/E: 18.31	Industry P/E: 15.11
P/S: 2.72	Price/Book: 2.38	EV/EBITDA: 14
Market Cap: $596.90M	Avg. Daily Volume: 238,061	52 Week Range: $12.36 – $19.95

4. National Instruments Corporation (NATI): $32.00

President James Truchard sold 80,500 shares of this application software and hardware company for an average selling price of $31.79, generating $2.56 million from the sale. Director Jeffrey Kodosky sold 12,000 shares for $30.52, generating $376,200 from the sale.

P/E: 71.43	Forward P/E: 20.25	Industry P/E: 27.88
P/S: 3.46	Price/Book: 3.73	EV/EBITDA: 22.68
Market Cap: $2.48B	Avg. Daily Volume: 251,758	52 Week Range: $23.91 – $36.98

5. iGATE Corporation (IGTE):$17.43

President and CEO Phaneesh Murthy sold 100,000 at an average selling price of $17.07, generating $1.71 million from the sale. Director Gordon Garrett sold 16,576 shares for $17.14, generating $284,067 from the sale. VP & Regional Manager – Canada Jason Trussell sold 11,825 shares for $16.99, generating $200,943 from the sale. Chief Delivery Officer – IT Services Suresh Sean Narayanan sold 9,274 shares for $17.01, generating $157,778. CFO Sujit Sircar sold 8,856 shares for $17.21, generating $152,387 from the sale.

P/E: 24.62	Forward P/E: 18.35	Industry P/E: 21.17
P/S: 4.25	Price/Book: 4.52	EV/EBITDA: 17.25
Market Cap: $972.77M	Avg. Daily Volume: 275,100	52 Week Range: $6.31 – $17.75

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Merger Arbitrage Mondays – July 19, 2010

July 18, 2010 | Merger Arbitrage | Author Asif

Mergers activity bounced back sharply last week with five new deals announced and three deals closing.

The founder of Playboy (PLA) Hugh Hefner made a bid to take the company private is a deal valued at $185 million and is now fighting a competing bid from Penthouse magazine, which has bid $210 million for the company. Since the board is still considering both offers, we have not included the deal in our merger arbitrage table below.

The new deals include the acquisition of Micrus Endovascular (MEND) by Johnson & Johnson (JNJ) for $23.40 per share in an all cash deal, the acquisition of Hewitt Associates (HEW) by Aon (AON) in a cash plus stock deal consisting of $25.61 in cash and 0.6362 in Aon stock, the acquisition of ADC Telecommunication (ADCT) by Tyco Electronics (TEL) for $12.75 per share in an all cash deal, the acquisition of NYMagic (NYM) by ProSight for $25.75 per share in an all cash deal and the acquisition of NBTY (NTY) by The Carlyle Group at $55 per share in an all cash deal.

The deals that closed include the acquisition of CKE Restaurants by an affiliate of Apollo Management, the acquisition of ev3 by Covidien on July 12, 2010 and the acquisition of Millipore by Merck on July 15, 2010.

If you are new to merger arbitrage, please feel free to check out our introduction to merger arbitrage here. You can also use our automated merger arbitrage tool that constantly updates the profits and annualized profits for all pending deals during market hours.

	Symbol	Announced Date	Acquiring Company	Closing Value	Closing Price	Last Price	Closing Date	Profit	Annu. Profit
+	WX	04/26/2010	Charles River Laboratories (CRL)	$1.6 billion	$20.44	$15.73	12/31/2010	29.91%	66.17%
Details of Wuxi Pharmatech (Cayman) Inc. A Expected to close by the end of the year for a closing values of $1.6bn. It is a cash and stock transaction in which WuXi PharmaTech ADS holders will receive $11.25 in cash and $10.00 of Charles River common stock determined by an exchange ratio. This exchange ratio will be determined by dividing $10.00 by the weighted average Charles River common stock closing price as reported on the New York Stock Exchange for the 20-day trading period ending on the second business day prior to closing (Charles River Average Price). However, if the Charles River Average Price is equal to or greater than $43.1726, then the exchange ratio will be fixed at 0.2316, and if the Charles River Average Price is equal to or less than $37.1486, then the exchange ratio will be fixed at 0.2692.
+	TLCR	06/07/2010	Grifols (GRF.MC)	$3.4 billion	$26.07	$21.31	12/31/2010	22.35%	49.44%
Details of Talecris Expected to close by the end of the year for a closing value of $3.4 billion. On the completion of the merger Grifols will pay $19 in cash and 0.641 newly issued, nonvoting shares for each share of Talecris.
+	SSE	02/23/2010	Naugatuck Valley Financial Corp (NVSL)	$19.5 million	$7.25	$6.40	08/16/2010	13.28%	173.13%
Details of Southern Connecticut Bancorp In Expected to close by the third calendar quarter of 2010, for a closing value of $19.5mn @ $7.25/share. The Cash/stock election is subject to proration
+	EMMS	05/25/2010	JS Acquisition and Alden Global Capital (N/A)	$3 billion	$2.40	$2.14	09/30/2010	12.15%	60.75%
Details of Emmis Communications Corporatio Expected to close in the third quarter of 2010 for a closing value of over $3bn. On the completion of the merger, Emmis Communications shareholders will receive $2.40 per share in cash.
+	AYE	02/11/2010	FirstEnergy (FE)	$8.5 billion	$24.75	$22.30	03/31/2011	11.00%	15.74%
Details of Allegheny Energy, Inc. Common S Expected to close by March 31, 2011 for a closing value $8.5bn. It is a stock based transaction @ 0.667 share of FE
+	BGH	06/11/2010	Buckeye Partners LP (BPL)	$1.14 billion	$43.29	$40.154	12/31/2010	7.80%	17.26%
Details of Buckeye GP Holdings Expected to close in the fourth quarter of 2010 for a closing value of $1.14 billion. Under the deal, for each Buckeye GP unit, holders will get 0.705 Buckeye Partners units.
+	PINN	02/24/2010	Investor Group lead by Scotia Waterous (USA) (N/A)	$11 million	$0.34	$0.32	08/21/2010	6.25%	69.13%
Details of Pinnacle Gas Resources, Inc. Expected to close by the second quarter of 2010 for a closing value of $11mn. It is a cash deal @ $0.34 per share
+	Q	04/22/2010	Century Link (CTL)	$10.6 billion	$5.75	$5.44	04/21/2011	5.77%	7.64%
Details of Qwest Communications Internatio Expected to close in the first half of 2011for a value of $10.6bn. Under the terms of the agreement, Qwest shareholders will receive 0.1664 CenturyLink shares for each share of Qwest common stock they own at closing.
+	DIVX	06/02/2010	Sonic Solutions (SNIC)	$323 million	$7.38	$7.0275	09/30/2010	5.00%	25.00%
Details of DivX Expected to close by the third quarter of 2010 for a cosing value of $323mn. On the completion of the merger, DivX shareholders will receive $3.75 in cash and 0.514 shares of Sonic Solutions common stock for each share of DivX they hold.
+	PRPX	02/17/2010	L.B. Foster Co. (FSTR)	$112 million	$11.71	$11.22	08/31/2010	4.37%	37.07%
Details of Portec Rail Products, Inc. Expected to close by the end of June 2010 for a closing value of $112mn. The cash deal is @ $11.71 per share
+	ALOY	06/24/2010	ZelnickMedia (N/A)	$126.5 million	$9.80	$9.40	12/31/2010	4.26%	9.41%
Details of Alloy Expected to close in the fourth quarter of 2010 for a closing value of $126.5 million. On the completion of the merger, shareholders of Alloy Inc. will receive $9.80 per share in cash.
+	TTIL	06/09/2010	Teoco Corp. (N/A)	$58 million	$3.00	$2.88	09/30/2010	4.17%	20.83%
Details of TTI Telecom Expected to close in the third quarter of 2010 for a closing value of $58 million. On the completion of the merger, TTIL shareholders will receive $3 per share in cash.
+	EFJI	05/17/2010	Francisco Partners (N/A)	N/A	$1.50	$1.45	09/30/2010	3.45%	17.24%
Details of EFJohnson Technologies, Inc Expected to close by the third quarter of 2010. On the completion of the merger, EF Johnson Technologies shareholders will receive $1.05 per share in cash. The deal was amended on June 21, 2010 and the acquisition price increased by 42% to $1.50.
+	PMACA	06/10/2010	Old Republic International (ORI)	$228 million	$6.92	$6.70	09/30/2010	3.27%	16.34%
Details of PMA Capital Expected to close in the third quarter of 2010 for a closing value of $228 million. As part of the agreement, Old Republic will issue 0.55 shares of its common stock in exchange for each outstanding common share of PMA.
+	GLG	05/17/2010	Man Group (N/A)	$1.6 billion	$4.50	$4.36	09/30/2010	3.21%	16.06%
Details of GLG Partners Inc Common Stock Expected to close by the third quarter of 2010 for a closing value of approximately $1.6bn. On the completion of the merger, GLG Partners shareholders will receive $4.50 per share in cash.
+	ECLP	06/09/2010	Allscripts-Misys Healthcare (MDRX)	$1.3 billion	$20.12	$19.52	11/15/2010	3.09%	9.49%
Details of Eclipsys Corporation Expected to close in the next four or six months from June 2010 for a closing value of $1.3 billion. On the completion of the merger, Eclipsys shareholders will receive 1.2 shares of Allscripts.
+	VETS	06/02/2010	VCA Antech Inc (WOOF)	$41.25 million	$0.34	$0.3301	09/30/2010	3.00%	15.00%
Details of PET DRx Corp Expected to close by the third quarter of 2010 for a closing value of $41.25mn. On the completion of the mergerPet DRx shareholders are expected to receive $0.34 – $0.36 per share in cash.
+	NTY	07/15/2010	The Carlyle Group (N/A)	$3.8 billion	$55.00	$53.45	12/31/2010	2.90%	6.41%
Details of NBTY Inc. Expected to close by the end of 2010 for a closing value of $3.8 billion. On the completion of the merger, NBTY shareholders will receive $55 per share in cash.
+	HEW	07/12/2010	Aon Corp (AON)	$4.9 billion	$48.67	$47.30	11/15/2010	2.89%	8.86%
Details of Hewitt Associates Expected to close by mid-November 2010, Aon Corp plans to acquire Hewitt Associates for $4.9 billion. The deal is a cash plus stock deal worth $50 at the time of announcement. Hewitt shareholders will receive $25.61 in cash and 0.6362 shares of AON.
+	MAM	03/12/2010	Emera Inc (N/A)	$75.7 million	$45.00	$43.85	12/31/2010	2.62%	5.80%
Details of Maine & Maritimes Corporation C Expected to close by the end of 2010 for a closing value of $75.7 million. The cash deal is @ $45 per share
+	PSYS	05/17/2010	Universal Health (N/A)	$3.1 billion	$33.75	$32.90	12/31/2010	2.58%	5.72%
Details of Psychiatric Solutions, Inc. Expected to close by the fourth quarter of 2010 for a closing value of $3.1bn. On the completion of the merger, Psychiatric Solutions shareholders will receive $33.75 per share in cash.
+	ATBC	05/10/2010	Jacksonville Bancorp (JAXB)	N/A	$2.59	$2.53	09/30/2010	2.53%	12.65%
Details of Atlantic BancGroup Inc Expected to close in the third quarter of 2010. If the merger is completed, Atlantic BancGroup shareholders will receive 0.2 shares of Jacksonville Bancorp common stock for each share of Atlantic BancGroup common stock held, plus up to approximately $0.65 per share in cash, subject to the qualifying sale of certain Atlantic BancGroup assets.
+	SWWC	03/03/2010	Institutional Investors (N/A)	$275 million	$11.00	$10.74	03/31/2011	2.42%	3.47%
Details of Southwest Water Company Expected to close by 3/31/2011 for a closing value of $275 million. It is a cash deal @ $11.00 per share
+	MIR	04/12/2010	RRI Energy In. (RRI)	$1.6 billion	$10.97	$10.72	12/31/2010	2.35%	5.19%
Details of Mirant Corp Common Stock Expected to close by the end of the year 2010 for a value of $1.6bn. Mirant Corp. will combine with RRI Energy Inc. in a stock-deal to form GenOn Energy. Mirant stockholders will get about 2.84 RRI common shares for each Mirant share they own.
+	OMNI	06/04/2010	Wellspring Capital Management (N/A)	$122 million	$2.75	$2.69	11/15/2010	2.23%	6.84%
Details of OMNI Energy Services Corp. Expected to close in the second half of 2010 for a closing value of $122mn. On the completion of the merger OMNI Energy Services shareholders will receive $2.75 per share in cash.
+	BNE	02/24/2010	RR Donnelley (RRD)	$481 million	$11.50	$11.26	09/30/2010	2.13%	10.66%
Details of Bowne & Co., Inc. Common Stock Expected to close by the second half of 2010 for a closing value of $481mn. It is a cash deal @ $11.50 per share
+	ME	04/15/2010	Apache (APA)	$2.7 billion	$21.90	$21.45	09/30/2010	2.11%	10.56%
Details of Mariner Energy, Inc. Mariner En Expected to close by the third quarter of 2010 for a value of $2.7bn. Under the cash and stock deal, Mariner stockholders will receive cash of $7.80 and 0.17043 of a share of Apache common stock in exchange for each share of Mariner common stock.
+	WAIN	06/29/2010	Eastern Bank (N/A)	$163 million	$19.00	$18.65	12/31/2010	1.88%	4.15%
Details of Wainwright Bank & Trust Expected to close in the fourth quarter of 2010 for a closing value of $163 million. On the completion of the merger, Eastern Bank will pay $19 in cash for each share of Wainwright Bank.
+	ADCT	07/13/2010	Tyco Electronics (TEL)	$1.24 billion	$12.75	$12.52	12/31/2010	1.84%	4.06%
Details of ADC Telecommunications Inc Expected to close in the fourth quarter of 2010, for a closing value of $1.24 billion. On the completion of the merger, ADC Telecommunications shareholders will receive $12.75 per share in cash
+	TSFG	05/17/2010	TD Bank Financial Group (N/A)	$61 million	$0.28	$0.275	09/30/2010	1.82%	9.09%
Details of The South Financial Group Inc. Expected to close by the third quarter of 2010 for a closing value of $61mn. On the completion of the merger, The South Financial Group shareholders will receive either $0.28 in cash or 0.004 shares of TD Bank Financial Group common stock per The South Financial Group common share held.
+	ACAP	07/08/2010	The Doctors Company (N/A)	$386 million	$41.50	$40.77	12/31/2010	1.79%	3.96%
Details of American Physicians Capital Inc. Expected to close in the fourth quarter of 2010 for a closing value of $386 million. On the completion of the merger, American Physicians Capital shareholders will receive $41.50 per share in cash.
+	NYM	07/15/2010	ProSight (N/A)	$230 million	$25.75	$25.31	12/31/2010	1.74%	3.85%
Details of NYMagic Expected to close in the fourth quarter of 2010 for a closing value of $230 million. On the completion of the merger, NYMagic shareholders will receive $25.75 per share in cash.
+	ODSY	05/24/2010	Gentiva Health Services (GTIV)	$1.0 billion	$27.00	$26.5575	09/30/2010	1.67%	8.33%
Details of Odyssey Healthcare, Inc. Expected to close in the third quarter of 2010 for a closing value of $1.0bn. On the completion of the merger, Odyssey HealthCare shareholders will receive $27.00 per share in cash.
+	WMZ	05/24/2010	Williams Partners L.P. (WPZ)		$34.29	$33.82	09/30/2010	1.40%	7.02%
Details of Williams Pipeline Partners LP C Expected to close in the third quarter of 2010. On the completion of the merger, Williams Pipeline Partners shareholders will receive 0.7584 shares of Williams Partners common stock per share held.
+	WEL	04/09/2010	Halliburton Company (HAL)	$240 million	$3.00	$2.96	09/30/2010	1.35%	6.76%
Details of Boots and Coots, Inc. Common St Expected to close in the summer of 2010 for a value of $240mn. The $3 cash & stock deal consists of $1.73 in cash and $1.27 in Halliburton stock.
+	PFWD	04/16/2010	Oracle Corp. (ORCL)	$685 million	$17.00	$16.79	06/30/2010	1.25%	0.00%
Details of Phase Forward Incorporated Expected to close in the middle of the year 2010 for a value of $685mn. Oracle is paying $17 per share in cash.
+	STBK	03/18/2010	Roma Financial Corp (ROMA)	$14.7 million	$2.52	$2.49	08/16/2010	1.20%	15.71%
Details of Sterling Banks, Inc. Expected to close in the third quarter of 2010 for a closing value of $14.7 million. The cash deal is @ $2.52 per share
+	VIRL	06/10/2010	Synopsys (SNPS)	$315 million	$12.00	$11.88	12/31/2010	1.01%	2.23%
Details of Virage Logic Corp Expected to close in the fourth quarter of 2010 for a closing value of $315 million. The deal values Virage at $12 per share.
+	RCNI	03/05/2010	ABRY Partners (N/A)	$536 million	$15.00	$14.87	09/30/2010	0.87%	4.37%
Details of RCN Corp. Expected to close by the Second half 2010 for a closing value of $536mn. It is a cash deal @ $15.00 per share
+	MEND	07/12/2010	Johnson & Johnson (JNJ)	$480 million	$23.40	$23.20	09/30/2010	0.86%	4.31%
Details of Micrus Endovascular Expected to close in the second half of 2010, JNJ plans to acquire MEND in an all cash deal valued at $480 million. MEND shareholders will receive $23.40 in cash should the deal complete.
+	SII	02/19/2010	Schlumberger (SLB)	$7.5 billion	$39.48	$39.15	09/30/2010	0.85%	4.26%
Details of Smith International, Inc. Commo Expected to close by the second half of 2010. It is a stock-for-stock merger @ 0.6966 shares of SLB / $42.96 per SII share
+	VTIV	05/06/2010	Thomas H. Lee Partners (N/A)	$1.1 billion	$26.00	$25.80	09/30/2010	0.78%	3.88%
Details of inVentiv Health, Inc. Expected to close by the third quarter of 2010 for a closing value of approx $1.1bn. Under the terms of the agreement, which has been approved by inVentiv’s board of directors, inVentiv shareholders will receive $26.00 in cash for each share of VTIV common stock they hold.
+	MDNU	06/11/2010	Danone (N/A)	$62.3 million	$4.00	$3.97	09/30/2010	0.76%	3.78%
Details of Medical Nutrition USA Expected to close in the third quarter of 2010 for a closing value of $62.3 million. On the completion of the merger, shareholders of Medical Nutrition USA will receive $4 per share in cash.
+	ATSI	04/29/2010	Medtronic (MDT)	$350 million	$4.00	$3.97	09/30/2010	0.76%	3.78%
Details of ATS Medical, Inc. Expected to close by September 30 for a value of $350mn. Medtronic is offering ATS Medical $4 per share
+	BSMD	05/13/2010	Merit Medical Systems (MMSI)	$96 million	$4.38	$4.35	09/30/2010	0.69%	3.45%
Details of BioSphere Medical, Inc. Expected to close in the third quarter of 2010 for a closing value of $96mn.If the merger is completed, BioSphere Medical shareholders will receive $4.38 per share in cash.
+	RBI	03/15/2010	affiliate of Oncap Management Partners L.P. (N/A)		$13.55	$13.46	08/16/2010	0.67%	8.72%
Details of Sport Supply Group, Inc Expected to close in the second or third quarter of 2010. ONCAP has the unilateral option to terminate the merger agreement by paying to Sport Supply Group a termination fee of either $6,000,000 or $10,000,000, depending on whether financing is available to ONCAP. It is a cash deal @ $13.55
+	DBTK	05/17/2010	Vision Solutions (N/A)	$242 million	$10.55	$10.48	09/30/2010	0.67%	3.34%
Details of Double-Take Software, Inc. Expected to close by the third quarter of 2010 for a closing value of $242mn. On the completion of the merger, Double-Take Software shareholders will receive $10.55 per share in cash.
+	IDC	05/04/2010	Silver Lake & Warburg Pincus (N/A)	$3.4 billion	$33.86	$33.67	09/30/2010	0.56%	2.82%
Details of Interactive Data Corporation Co Expected to close by the third quarter of 2010 for a cosing value of $3.4bn. According to the deal, Interactive Data shareholders will receive $33.86 per share in cash.
+	GNA	06/02/2010	Gerdau (GGB)	$1.7 billion	$11.00	$10.94	08/31/2010	0.55%	4.66%
Details of Gerdau Ameristeel Corporation Expected to close by August 31, 2010 for a closing value of $1.7 billion. On the completion of the merger Gerdau Ameristeel shareholders will receive $11.00 per share in cash.
+	NADX	04/05/2010	GDC Holdings Inc. (N/A)	$100 million	$17.00	$16.91	09/30/2010	0.53%	2.66%
Details of National Dentex Corporation Expected to close at the end of the quarter ending June 30 for a value of $100mn. The deal is @ $17.00 per share in cash.
+	QUOT	06/11/2010	LQ Acquisition (N/A)	$19 million	$4.00	$3.98	09/30/2010	0.50%	2.51%
Details of Life Quotes Expected to close in the third quarter of 2010 for a closing value of $19 million. On the completion of the merger Life Quotes shareholders will receive $4.00 per share in cash.
+	ORCD	03/16/2010	eMusic (N/A)	$12.77 million	$2.05	$2.04	08/16/2010	0.49%	6.39%
Details of The Orchard Enterprises, Inc Expected to close by the third quarter of 2010 for $12.7 million @ $2.05 per share.
+	CRN	04/19/2010	GeoGroup (GEO)	$685 million	$27.39	$27.26	09/30/2010	0.48%	2.40%
Details of Cornell Corrections, Inc. Commo Expected to close in the third quarter of 2010 at an estimated enterprise value of $685 million based on the closing prices of both companies
+	SNWL	06/03/2010	investor group led by private equity firm Thoma Bravo LLC (N/A)	$636 million	$11.50	$11.45	12/31/2010	0.44%	0.97%
Details of SonicWall Expected to close by the end of the year for a closing value of $636mn.On the completion of the merger SonicWall shareholders will get $11.50 per share in cash.
+	CPII	05/10/2010	Comtech (CMTL)	$472.3 million	$15.95	$15.89	09/30/2010	0.37%	1.87%
Details of CPI International, Inc. Expected to close in the third quarter of 2010 for a closing alue of $472.3mn. If the merger is completed, CPI International shareholders will receive a combination of $9.00 in cash plus a fraction of Comtech common stock equal to $8.10 divided by the average closing price of Comtech common stock over a specified period of time prior to closing, provided that the fraction shall not be greater than 0.2382 nor less than 0.2132.
+	VRAD	05/17/2010	Providence Equity (N/A)	$294 million	$17.25	$17.20	09/30/2010	0.29%	1.45%
Details of Virtual Radiologic Corporation Expected to close by the third quarter of 2010 for a closing value of $294mn. On the completion of the merger, Virtual Radiologic shareholders will receive $17.25 per share in cash.
+	STST	06/30/2010	Boeing (BA)	$775 million	$34.50	$34.40	09/30/2010	0.29%	1.45%
Details of Argon ST Expected to close by the end of the second quarter for a closing value of $755 million.On the completion of the merger, stockholders of Argon ST will receive $34.50 per share in cash.
+	SXE	05/07/2010	CGI Group (N/A)	$904 million	$37.50	$37.40	09/30/2010	0.27%	1.34%
Details of Stanley, Inc. Common Stock Expected to close during the fall of 2010 for a closing value of $904mn. CGI will pay shareholders $37.50 for each share of Stanley.
+	SY	05/12/2010	SAP (SAP)	$5.8 billion	$65.00	$64.83	09/30/2010	0.26%	1.31%
Details of Sybase, Inc. Common Stock Expected to close in the third quarter of 2010 for a closing value of $5.8bn. If the merger is completed, Sybase shareholders will receive $65.00 per share in cash.
+	SMTS	06/16/2010	Covidien (COV)	$299 million	$25.00	$24.94	07/31/2010	0.24%	7.32%
Details of Somanetics Corp. Expected to close on July 21, 2010 for a closing value of $299 million. On the completion of the merger Somanetics shareholders will receive $25 per share in cash.
+	SBP	06/24/2010	ABLASA (N/A)	N/A	$12.69	$12.66	07/22/2010	0.24%	28.83%
Details of Santander Bancorp Expected to close by July 22, 2010 unless extended. On the completion of the merger Santander BanCorp shareholders will receive $12.69 per share in cash.
+	CYBS	04/21/2010	Visa Inc. (V)	$2.0 billion	$26.00	$25.96	09/30/2010	0.15%	0.77%
Details of CyberSource Corporation Expected to close in Visa’s Fourth Fiscal Quarter ending in September for a closing value of $2bn. The closing price for the cash deal is at a price of $26.00 per share.
+	AIPC	06/21/2010	Ralcorp Holdings (RAH)	$1.2 billion	$53.00	$52.94	09/30/2010	0.11%	0.57%
Details of American Italian Pasta Expected to close during Ralcorp Holding's fourth fiscal quarter ending Sept. 30 for a closing value of $1.2 billion. On the completion of the merger, Ralcorp Holdings will pay shareholders of American Italian Pasta $53 per share in cash
+	NGA	04/01/2010	AZZ Inc. (AZZ)	$125.6 million	$7.50	$7.50	08/31/2010	0.00%	0.00%
Details of North American Galvanizing & Co Expected to close by the end of AZZ’s fiscal second quarter, Aug. 31for a value of $125.6 million. AZZ plans a cash tender offer for NAGC of $7.50 per share
+	VRX	06/21/2010	Biovail Corporation (BVF)	$3.3 billion	$53.26	$53.58	12/31/2010	-0.60%	-1.32%
Details of Valeant Pharmaceuticals Expected to close by the end of 2010 for a closing value of roughly $3.3 billion. Valeant stockholders will get a one-time special cash dividend of $16.77 per share and 1.7809 shares of Biovail common stock. The combined company will pay an additional $1/share dividend to all stockholders of the new entity.
+	CAL	05/03/2010	United (UAUA)	$1.2 billion	$22.42	$22.86	12/31/2010	-1.94%	-4.28%
Details of Continental Airlines, Inc. Comm Expected to close by the end of 2010 for a closing value of approximately $1.2bn. In the merger, Continental shareholders will receive 1.05 shares of United common stock for each Continental common share they own.
+	ABII	06/30/2010	Celgene (CELG)	$2.9 billion	$71.62	$74.37	12/31/2010	-3.70%	-8.18%
Details of Abraxis Bioscience Inc. Expected to close in the fourth quarter of 2010 for a closing value of $2.9 billion. Under terms of the deal, shareholders of Abraxis will receive $58 and 0.2617 shares of Celgene for each Abraxis share they own.
+	ARD	04/04/2010	SandRidge Energy Inc. (SD)	$1.6 billion	$33.93	$35.98	09/30/2010	-5.69%	-28.44%
Details of Arena Resources Inc Common Stoc Expected to close during the second or third quarter of 2010 for a value of $1.6bn. The stock-cash merger is @ 4.7771 shares of SandRidge common stock and $2.50 in cash for each share of Arena common stock.
+	MCCC	06/01/2010	Chief Executive Rocco Commisso (N/A)	$590 million	$6.00	$6.73	N/A	-10.85%	0.00%
Details of Mediacom Communications Corporation
+	DTG	04/26/2010	Hertz (HTZ)	$1.3 billion	$39.19	$46.22	12/31/2010	-15.22%	-33.67%
Details of Dollar Thrifty Automotive Group Expected to close by the end of the year for a value of $1.3 billion. The transaction values Dollar Thrifty stock at approximately $41.00 per share. the $41.00 per share purchase price is comprised of 80% cash consideration and 20% stock consideration. The cash portion will be paid in two components; (1) a $200 million special cash dividend representing approximately $6.88 per share, to be paid by Dollar Thrifty immediately prior to the transaction closing and (2) $25.92 per share to be paid by Hertz at the closing. The stock is at a fixed exchange ratio of 0.6366 per share, based upon a Hertz common stock closing price of $12.88 per share on April 23, 2010.
+	CCE	02/25/2010	The Coca-Cola Company (KO)	$12.3 billion	N/A	$27.69	10/01/2010	N/A	N/A
Details of Coca-Cola Enterprises, Inc. Com Expected to close by October 1, 2010 for a closing value of $12.3 billion. The deal includes $10 per share + a share in a new bottling company

Voluntary Disclosure: I own positions in Coca-Cola Enterprises (CCE) and Portec Rail Products (PRPX).

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Insider Weekends – July 16, 2010

July 17, 2010 | Insider Buying | Author Asif

Welcome to the sixth edition of Insider Weekends. Insider buying fell to its lowest level since we started collecting this information in the last week of April. Insiders purchased just $6.45 million of their stock last week while selling picked up pace with insiders selling $316.4 million worth of stock. We removed a very large $100 million transaction both on the buy side and the sell side for movie theater company Regal Entertainment Group (RGC) as it was simply a transfer of stock and not actual insider buying or selling.

Sell/Buy Ratio:

The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider buying in that week. The adjusted ratio for last week jumped up to 49.07. In other words, insiders sold almost 49 times as much stock as they purchased. This compares unfavorably with the week prior when the ratio stood at 32.90 and just 2.55 the week before that. We are calculating an adjusted ratio by removing transactions by funds and trying as best as possible only to retain information about insiders and 10% owners who are not funds.

Notable Insider Buys Last Week:

1. Monsanto Company (MON) $56.20

Chairman, President & CEO, Hugh Grant acquired 37,500 shares of this Agricultural Products Company, paying $52.06 per share for a total amount of $1.95 million. EVP and CFO Carl Casale also acquired 30,000 shares, paying $52.09 per share for a total amount of $1.56 million.

Key Statistics:

P/E: 30.46	Forward P/E: 18.73	Industry P/E: 15.97
P/S: 2.90	Price/Book: 2.86	EV/EBITDA: 11.95
Market Cap: $30.37 billion	Avg. Daily Volume: 9,752,290	52 Week Range: $44.61 – $87.28

2. Luby’s Inc. (LUB) $4.91

Chief Operating Officer, Harris J. Pappas acquired 88,134 shares of this Texas based restaurant operator, paying $4.95 per share, for a total amount of $436,263. President & CEO Christopher James Pappas also acquired 88,134 shares, paying $4.95 per share, for a total amount of $436,263. Luby’s recently acquired the assets of Fuddruckers for $61 million in cash after Fuddruckers filed for bankruptcy.

Key Statistics:

P/E: N/A	Forward P/E: 32.73	Industry P/E: 14.86
P/S: 0.49	Price/Book: 0.83	EV/EBITDA: 288.44
Market Cap: $137.74 million	Avg. Daily Volume: 122,536	52 Week Range: $3.25 – $5.03

3. FTI Consulting (FCN) $33.62

President & CEO, Jack B Dunn IV acquired 10,000 shares of this business advisory company, paying $33.19 per share for a total amount of $331,895. Chairman of the Board, Dennis J Shaughnessy also acquired 10,000 shares, paying $32.82 per share for a total amount of $328,168.

Key Statistics:

P/E: 13.88	Forward P/E: 11.63	Industry P/E: 20.69
P/S: 1.12	Price/Book: 1.40	EV/EBITDA: 6.45
Market Cap: $1.58 billion	Avg. Daily Volume: 953,661	52 Week Range: $30.78 – $56.41

4. Agilysys (AGYS) $6.99

Director Andrew R Cueva acquired 33,971 shares of this IT services provider through his fund MAK Capital, paying $7.21 per share for a total amount of $244,994. This is the fourth week Agilysys has made our list.

Key Statistics:

P/E: 45.39	Forward P/E: 20.56	Industry P/E: 19.46
P/S: 0.27	Price/Book: 0.85	EV/EBITDA:14.45
Market Cap: $160.32 million	Avg. Daily Volume: 172,553	52 Week Range: $4.28 – $12.50

5. A. Schulman (SHLM) $18.04

VP – Global Supply Chain & CPO, Gary A Miller acquired 10,000 shares of this plastics supplier, paying $19.13 per share for a total amount of $191,300.

Key Statistics:

P/E: 17.18	Forward P/E: 9.45	Industry P/E: 17.28
P/S: 0.42	Price/Book: 1.22	EV/EBITDA: 7.74
Market Cap: $567.95 million	Daily Volume: 277,302	52 Week Range: $16.15 – $27.23

Voluntary Disclosure: I own a long position in Luby’s (LUB).

Notable Insider Sales Last Week:

1. Apollo Group (APOL) $45.57

Vice Chairman of the Board Peter Sterling sold 250,000 shares of this large for-profit education company (Apollo is the parent company of the widely recognized University of Phoenix) for $43.80 per share, for a total amount of $10.95 million.

Key Statistics:

P/E: 11.68	Forward P/E: 8.11	Industry P/E: 19.67
P/S: 1.39	Price/Book: 4.77	EV/EBITDA: 4.19
Market Cap: $6.72 billion	Avg. Daily Volume: 3,403,740	52 Week Range: $41.45 – $76.86

2. Fastenal Company (FAST) $47.66

Director Robert A Kierlin sold 150,000 shares of this industrial & construction supplier for $49.84 per share for a total amount of $7.48 million.

Robert Kierlin was Fastenal’s CEO from 1968 through 2002 and has been the Chairman since incorporation. This sale represents a 2% reduction of his overall position.

Key Statistics:

P/E: 32.42	Forward P/E: 21.96	Industry P/E: 22.85
P/S: 3.57	Price/Book: 5.83	EV/EBITDA: 17.45
Market Cap: $7.03 billion	Avg. Daily Volume: 1,355,680	52 Week Range: $32.71 – $56.65

3. Capital One Financial Corporation (COF) $41.46

President, Financial Services, Sanjiv Yajnik sold 84,951 shares for $45 per share for a total amount of $3.82 million.

Key Statistics:

P/E: 16.45	Forward P/E: 9.82	Industry P/E: 11.85
P/S: 1.98	Price/Book:0.81	EV/EBITDA: N/A
Market Cap: $18.93 billion	Avg. Daily Volume: 7,151,470	52 Week Range: $25.70 – $47.73

4. Guess? Inc. (GES) $32.56

Director, Carlos Alberini sold 113,991 shares of this retail chain for $32.91 per share for a total amount of $3.75 million.

Key Statistics:

P/E: 11.65	Forward P/E: 9.81	Industry P/E: 15.10
P/S: 1.43	Price/Book: 2.99	EV/EBITDA: 5.53
Market Cap: $3.04 billion	Avg. Daily Volume: 2,101,710	52 Week Range: $25.85 – $51.28

5. Advent Software Inc. (ADVS) $48.00

CEO Stephanie Dimarco also sold 20,000 shares of this financial software services provider for $49.28 per share for a total amount of $985,582. Director George Battle sold 10,000 shares for $50 per share for a total amount of $500,000.

Key Statistics:

P/E: 36.89	Forward P/E: 30.38	Industry P/E: 24.27
P/S: 4.91	Price/Book: 5.10	EV/EBITDA: 27.56
Market Cap: $1.24 Billion	Avg. Daily Volume: 122,555	52 Week Range: $33.18 – $50.20

On an unrelated note, located right across from Advent Software’s San Francisco headquarters is one of the most delightful little French bakeries I have ever set foot into. Patisserie Philippe has amazing fruit tartelettes, a chocolate banana pastry that is to die for (can’t recollect its name) and their freshly baked large chocolate chip cookies with walnuts tend to sell out early. Definitely worth a visit if you live in the City or happen to visit San Francisco.

Contributing author: Ann Kumar

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A Tale of Two IPOs

July 16, 2010 | Stocks | Author Asif

The stock of electric car company Tesla Motors (TSLA) has been more breathtaking to watch than one of its expensive $100,000+ roadsters that I happened to come across earlier this week near the post office in my city. Following its June 29 IPO priced at $17, the stock hit a high of $30.42 the next day before promptly losing more than half its value the following week, bottoming just under $15. The stock currently trades 17% above its IPO price at $19.89. While a lot of attention has been focused on this money losing yet promising company that is backed by a $465 million government loan, a $50 million investment by Toyota Motor (TM), a $50 million investment by Daimler and top tier silicon valley VCs, investors who have a strong stomach for volatility should probably revisit another company that went public earlier this year. This company saw its stock close 44% above its IPO price on its first day of trading when compared to Tesla’s 40% opening day pop.

This company is profitable, has a proven business model and one of its founders is a Nobel laureate. Financial Engines (FNGN) priced its IPO at $12 per share in March of this year and currently trades about 11% above its IPO price at $13.42. The company has a disruptive yet proven business model where it uses technology to offer portfolio management services and investment advice. Given the importance of asset allocation to portfolio returns as discussed in our October 2008 newsletter, William Sharpe, Professor of Finance, Emeritus at Stanford University and winner of the 1990 Noble Prize in Economics decided to start Financial Engines in 1996 and use technology to offer sophisticated investment advice to individuals regardless of their wealth or investment experience.

While the average client balance for the top 100 traditional Registered Investment Advisors (RIAs) is over $1 million, the average size of a portfolio managed by Financial Engines is $72,000. In fact 43% of the portfolios managed by the company have less than $20,000 in them. Despite the low average portfolio size, Financial Engines has almost $30 billion in assets under management (AUM) as of the first quarter of 2010. Their technology based solution and partnerships with several large employers to offer advice to 401K participants has helped the company scale AUM effectively from $6 billion in 2006 to $30 billion now. The company has partnerships with 115 of the Fortune 500 companies and has signed up over 360 employers in total.

Growth:

The company has a three pronged growth strategy:

1. Grow Assets Under Contract (AUC), which are currently $289 billion, by signing on more employers, organic growth through ongoing contributions by existing 401K participants, market appreciation, net new hires by employers and a shift towards automatically enrolling employees in 401K plans.

2. Grow Assets Under Management (AUM) by increasing enrollment by 401K participants from employers under contract who have not signed on yet.

3. Entering new markets by going beyond 401Ks and into IRA.

Q1 2010 Results:

Revenue in the first quarter of 2010 increased 40% year-over-year to $24.3 million. Net income increased to $1.6 million in Q1 2010 when compared to a loss of $0.7 million in Q1 2009. Non-GAAP Adjusted EBITDA for Q1 2010 increased 130% year-over-year to $5.3 million. However due to a one-time $5.5 million stock dividend, net loss attributable to shareholders was $3.9 million or 25 cents a share.

Valuation:

Financial Engines expects to post revenue of $105 to $110 million in 2010 and adjusted EBITDA of $24 to $26 million. Using the mid-point of their EBITDA range and the current enterprise value of $448 million, I get a EV/EBITDA value of 18. The EV/Revenue ratio works out to 4.17. The company expects long-term EPS growth of 25 to 40% at operating margins of 15 to 20%.

Running a 10 year DCF model using a 10% discount rate, 20% earnings growth for 10 years and a 2% terminal rate, I get a current value of $23.54 for the stock. If you are a growth investor, Financial Engines should definitely be on your watch list and may provide a less risky alternative to Tesla Motors.

Related Reading:

Original S-1 Filing

William Sharpe and the Capital Asset Pricing Model (CAPM)

Investor Presentation – June 2010

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Merger Arbitrage Mondays – July 26, 2010

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