The Special Situation Report #17: 5/15 Roundup

Summary of the Week in Special Situations

May 15, 2022

Ten public companies announced sale transactions last week. Five of them were previously featured in this weekly roundup (HMTV, PCOM, SREV, SWCH, & TREC).

These transactions are not occurring in a vacuum. There are often signs of a forthcoming transaction.

An activist investor calling for a company to explore strategic alternatives. An outside beneficial owner increasing its position. A consolidation wave sweeping a sector.

Happy hunting.

Update on Developing M&A

Strategic Alternatives & Ongoing Situations

Capital & Counties Properties (LSE: CAPC) and Shaftesbury (LSE: SHB) disclosed they were in advanced merger talks (Reuters)
Duke Realty (DRE) responded to acquisition proposal from Prologis (PLD); said proposed value is insufficient (Press Release)
Nomad Foods (NOMD) co-chairmen and founders disclosed in 13D filing that they are evaluating strategic alternatives (Filing)
Ontex (ONXXF) confirmed takeover talks with American Industrial Partners (Press Release)
Rackspace Technology (RXT) announced review of strategic alternatives; received inbound interest for one of their businesses (Filing)
Ryder (R) received a takeover proposal from HG Vora which also disclosed a 10% stake (Filing)

Rumors

8X8 (EGHT) subject of takeover speculation (Seeking Alpha)
Monroe Capital (MRCC) is exploring options including the sale of a stake in itself (Bloomberg)
XP (XP) reportedly subject of interest from Charles Schwab (SCHW) after recently selling stake to Itau Unibanco (ITUB) (Reuters)
Zendesk (ZEN) continued chatter regarding a takeover (Seeking Alpha)

Update on Shareholder Activism

Everbridge (EVBG) activist Ancora received some support from ISS in proxy battle (Press Release)
International Seaways (INSW) 17% shareholder Seatankers Group sent a letter to the board (Filing)
Kohl's (KSS) shareholders vote in favor of incumbent directors in proxy battle (Press Release)
Middlefield Banc (MBCN) shareholders voted against sale proposal at AGM (Filing)
MiMedx Group (MDXG) shareholder Prescience Point Capital sent an open letter to shareholders expressing concern with management and governance (Filing)
US Foods (USFD) announced CEO transition and board changes in cooperation agreement Sachem Head (Filing)

Update on Other Special Situations

Spin-Offs

Aramark (ARMK) announced plan to spin-off its uniform services business (Press Release)
Brookfield Asset Management (BAM) announced plan to spin-off its asset management business (Press Release)
Pfizer (PFE) will spin-off Biohaven’s (BHVN) non-migraine assets to shareholders (Press Release)

Other

Mondelez (MDLZ) announced plans to divest its developed market gum business and its Halls business (Filing)
Robinhood Markets (HOOD) Sam Bankman-Fried (owner of FTX Exchange) disclosed 8% stake in 13D filing (Filing)
Roper Technologies (ROP) reportedly close to a deal with CD&R to sell process-technology unit (Bloomberg)
White Mountains Insurance (WTM) announced sale of NSM to Carlyle (CG) (Press Release)

Announced M&A

Target / Acquirer – Transaction Enterprise Value

Energy & Natural Resources

Trecora Resources (TREC) / Balmoral Funds – $286mm (Press Release)

Financials

First Citrus Bank (FCIT) / DFCU Financial (Press Release)
Points.com (PCOM) / Plusgrade – $350mm (Press Release)

Healthcare

Biohaven (BHVN) / Pfizer (PFE) – $12bn (Press Release, Investor Presentation)

Industrials

Swedish Match (SWMAY) / Philip Morris (PMI) – $16bn (Press Release)

Technology, Media & Telecommunications

Hailiang Education (HLG) / Hailiang Feng – $370mm (Press Release)
Hemisphere Media (HMTV) / Searchlight Capital Partners – $496mm (Press Release)
Redbox Entertainment (RDBX) / Chicken Soup (CSSE) – $330mm (Press Release, Investor Presentation)
ServiceSource (SREV) / Concentrix (CNXC) – $131mm (Press Release)
Switch (SWCH) / Digital Bridge (DBRG) – $11bn (Press Release)

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