Merger Arbitrage Mondays – Contentious Acquisition Of Forescout Technologies Finally Closes


Merger activity decreased last week with three new deals announced and three deals completed.

After a significant increase in the previous week, merger activity decreased slightly with three new deals announced last week. Johnson & Johnson (NYSE:JNJ) announced the acquisition Momenta Pharmaceuticals (NASDAQ:MNTA) last week for $6.1 billion or $52.50 per share in cash, representing a 70% premium to Momenta’s closing price on August 18, 2020. There have been six deals announced in the health care sector in the month of August so far, for a total value of over $45 billion.

Weekly Spread Changes:

The table below shows weekly spread changes between August 14, 2020, and August 21, 2020.

Symbol Quote Acquiring Company Acquiring Company Quote Current Spread Last Week Spread Spread Change Weekly Deal Type
CDOR 4.38 NexPoint Hospitality Trust (N/A) 153.42% 146.67% 6.75% All Cash
GILT 5.45 Comtech Telecommunications Corp. (CMTL) 16.67 57.51% 53.32% 4.19% Cash Plus Stock
CXDC 1.15 Faith Dawn Limited and Faith Horizon (N/A) 4.35% 2.56% 1.79% All Cash
ONDK 1.51 Enova International, Inc. (ENVA) 16.21 6.71% 5.17% 1.54% Cash Plus Stock
GSB 9.54 HelpSystems (N/A) -0.42% -1.76% 1.34% All Cash
CETV 4.12 PPF Group N.V. (N/A) 11.17% 13.09% -1.92% All Cash
BREW 15.89 Anheuser-Busch (N/A) 3.84% 5.77% -1.93% All Cash
GNW 2.61 China Oceanwide Holdings Group Co., Ltd. (N/A) 108.05% 111.28% -3.23% All Cash
SUNW 0.761 The Peck Company Holdings, Inc. (PECK) 3.64 -11.43% -4.79% -6.64% All Stock

Deal Statistics:

Total Number of Deals Closed in 2020 91
Total Number of Deals Not Completed in 2020 14
Total Number of Pending Deals
Cash Deals 29
Stock Deals 13
Stock & Cash Deals 4
Special Conditions 3
Total Number of Pending Deals 49
Aggregate Deal Consideration $632.83 billion

New Deals:

  1. The acquisition of Yintech Investment Holdings Limited (NASDAQ:YIN) for $540.2 million in a going-private transaction. Under the terms of the merger agreement, each common share will be exchanged for the right to receive US$0.365 in cash without interest, and each American Depositary Share of the company, each representing twenty common shares will be exchanged for the right to receive US$7.30 in cash per ADS without interest. We added YIN as a potential deal to the Deals in the Works section on June 22, 2020, and the price after the news of the potential deal came out was $6.55.
  2. The acquisition of Momenta Pharmaceuticals by Johnson & Johnson for $6.5 billion or $52.50 per share in cash.
  3. The acquisition of Hudson (NYSE:HUD) by Dufry AG Group for $3.5 billion or $7.70 per share in cash.

Deal Updates:

  1. On August 18, 2020, Sunrun (NASDAQ:RUN) and Vivint Solar (NYSE:VSLR) announced that Coatue US 24 LLC, a vehicle affiliated with Coatue Management, has entered into a Stock Purchase Agreement with 313 Acquisition LLC.
  2. On August 20, 2020, The Federal Trade Commission (FTC) has granted early termination of the required waiting period under the Hart-Scott-Rodino Act with respect to the acquisition of Noble Energy (NASDAQ:NBL) by Chevron Corporation (NYSE:CVX).
  3. On August 21, 2020, InnerWorkings (NASDAQ:INWK) announced that the special meeting of stockholders of Gaming Partners International Corporation will be held virtually via the Internet on September 24, 2020.
  4. On August 21, 2020, UK’s CMA announced that it has extended the consideration of undertakings with respect to investigations of the anticipated acquisition by Stryker Corporation (NYSE:SYK) of Wright Medical Group (NASDAQ:WMGI) until 4 November 2020.

Closed Deals:

  1. The acquisition of Forescout Technologies (FSCT) by Advent International on August 17, 2020. It took 193 days for this deal to be completed.
  2. The acquisition of Franklin Financial Network (FSB) by FB Financial Corporation (NYSE:FBK) on August 17, 2020. It took 209 days for this deal to be completed.
  3. The acquisition of Benefytt Technologies (NASDAQ:BFYT) by Madison Dearborn Partners on August 21, 2020. It took 39 days for this deal to be completed.

Top 10 deals with largest spreads:

Symbol Announced Date Acquiring Company Closing Price Last Price Closing Date Profit Annualized Profit
CDOR 07/22/2019 NexPoint Hospitality Trust (N/A) $11.10 $4.38 09/30/2020 153.42% 1473.68%
GNW 10/23/2016 China Oceanwide Holdings Group Co., Ltd. (N/A) $5.43 $2.61 09/30/2020 108.05% 1037.81%
GILT 01/29/2020 Comtech Telecommunications Corp. (NASDAQ:CMTL) $8.58 $5.45 10/31/2021 57.51% 48.37%
FIT 11/01/2019 Google LLC (NASDAQ:GOOG) (NASDAQ:GOOGL) $7.35 $6.35 12/31/2020 15.75% 44.22%
CETV 10/27/2019 PPF Group N.V. (N/A) $4.58 $4.12 10/27/2020 11.17% 62.70%
TIF 11/25/2019 LVMH Moët Hennessy Louis Vuitton SE (OTCPK:LVMUY) $135.00 $126.01 09/30/2020 7.13% 68.53%
ONDK 07/28/2020 Enova International, Inc. (NYSE:ENVA) $1.61 $1.51 12/31/2020 6.71% 18.84%
MXIM 07/13/2020 Analog Devices, Inc. (NASDAQ:ADI) $73.09 $68.51 06/30/2021 6.69% 7.85%
WLTW 03/09/2020 Aon plc (NYSE:AON) $209.13 $198.08 06/30/2021 5.58% 6.55%
CBMG 08/12/2020 CBMG management (N/A) $19.75 $18.74 12/31/2020 5.39% 15.13%

The aggregate deal consideration decreased to $632.83 billion last week.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.

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