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   Strategies & Market TrendsSpeculating in Takeover Targets

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To: richardred who wrote (3134)9/24/2013 8:19:52 AM
From: richardred
   of 6657
Applied Materials to Merge With Tokyo Electron

Applied Materials agreed on Tuesday to merge with Tokyo Electron in an all-stock deal, creating a big new producer of semiconductor and display manufacturing equipment with an expected market value of $29 billion.

P.S. IMO-This merger should create some big reasons for more consolidation in the industry.

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To: richardred who wrote (3067)9/26/2013 10:45:46 AM
From: richardred
   of 6657
Danaher has a war chest- Pall would be expensive, but BRKS would be a nice bolt on IMO. They even bought my Keithly Instruments years ago.

Danaher $8 Billion Seen Fueling Bids for Pall, Spectris
By Brooke Sutherland & Thomas Black - Sep 10, 2013 10:47 AM ET

Danaher Corp. (DHR), a maker of everything from dental equipment to water filters, may spend some of its more than $8 billion in takeover firepower on Pall Corp. or Spectris Plc (SXS) to help boost sales amid the slowest growth in four years.

Chief Executive Officer Larry Culp said in July that the $47 billion company is looking for deals that can increase returns for shareholders. Spectris, a $4.3 billion maker of testing gear, could lure Danaher with its high margins and the opportunity for cost cutting, said Credit Suisse Group AG. Pall, an $8.1 billion supplier of water-filtration technology, could be an attractive target, FBR & Co. and Longbow Research said.

Danaher hasn’t spent more than $1 billion on a purchase since 2011, and now has a record amount of cash for takeovers. Macquarie Group Ltd. said investors are eager for more dealmaking, with the Washington-based company’s sales poised to increase by less than 4 percent this year, down from growth of more than 12 percent every year since 2009, according to data compiled by Bloomberg.

“Larry has made it pretty clear that he has that firepower,” Ajay Kejriwal, a New York-based analyst at FBR, said in a phone interview. “Given their track record, investors know that they will do something. It’s just a matter of time.”

A representative for Danaher said the company declined to comment.

Acquisition Strategy Danaher’s business is divided into five units: dental; test and measurement; environmental; life sciences and diagnostics; and industrial technologies. The company, which pays a quarterly dividend of just 2.5 cents a share, has historically rewarded shareholders by making acquisitions that fuel growth.

The company’s market value has surged more than four-fold in the last decade as it completed about 68 takeovers. While Danaher has already announced five deals this year, it hasn’t spent more than $1 billion on a transaction since the purchase of Beckman Coulter Inc. for about $7 billion in 2011, data compiled by Bloomberg show.

“This is a company that again and again has shown that via M&A it can create a ton of value,” Ross Muken, a New York-based analyst at International Strategy & Investment Group LLC, said in a phone interview. Danaher is “overdue” for a transaction.

Analysts estimate the company will boost sales 3.8 percent this year to $19 billion, the slowest growth since 2009.

Cash Advantage Danaher had a record $2.3 billion in cash as of June, according to data compiled by Bloomberg that goes back to 1987.

“The great advantage that Danaher has is that balance sheet, and so people would like them to put it to use,” Jonathan Groberg, a New York-based analyst at Macquarie, said in a phone interview. Without deals, “you’re left with a low-growth business.”

Danaher has the capability to do more than $8 billion in deals through 2014, Culp said on the company’s second-quarter earnings call in July.

“We’re looking for great fits where we can add value, where we can generate a return for our shareholders,” the CEO said. The company is having “high-quality conversations with high-quality companies.”

Pall (PLL), whose CEO Larry Kingsley is a former Danaher executive, has attractive margins and would be a “good strategic fit” within the conglomerate’s environmental-technologies division, said Kejriwal of FBR.

Revenue Stream Danaher could also be attracted to Pall’s steady revenue stream from installing and replacing filtration devices, according to Mark Douglass, an Independence, Ohio-based analyst at Longbow. Pall had sales of $2.6 billion in its latest fiscal year.

A deal “would definitely make sense,” Douglass said in a phone interview. Pall employees “would have already been introduced to at least some of the practices of the Danaher business system with an ex-Danaher manager at the helm.”

Pall’s valuation could be a deterrent to a deal, said Douglass and David Rose, a Los Angeles-based analyst at Wedbush Inc. The company’s market value has surged more than 70 percent since Kingsley took over as CEO in October 2011.

Spectris would be a more digestible target for Danaher, which would be drawn to its high margins, steady revenue and the potential for consolidation within the conglomerate’s own test and measurement division, according to Julian Mitchell, a New York-based analyst at Credit Suisse. Spectris generated revenue of $1.95 billion in 2012.

‘Right Wheelhouse’ “You look at their market cap, it’s in the right wheelhouse,” Mitchell said in a phone interview. “There’s scope for someone with a very good operating system like the Danaher business system to come in there and take out costs by centralizing the supply chain, the sales forces.”

Doug Novarro, a spokesman for Port Washington, New York-based Pall, didn’t return phone or e-mail messages requesting comment, while Clea Rosenfeld, head of corporate affairs at Egham, England-based Spectris, declined to comment on the potential for a deal with Danaher.

Today, Pall shares climbed 2.1 percent to $73.69 at 10:40 a.m. New York time, headed for an all-time closing high. Spectris rose 0.5 percent to 2,327 pence.

Danaher could seek acquisitions to bulk up its product-identification business, which makes printing and coding equipment, according to Muken of ISI. The operations are part of Danaher’s industrial technologies division.

“There’s still lots of companies available” for takeovers, Muken said. “You’ve got this mix of attractive market growth, no installed leader of size.”

Danaher also could pursue transactions in the life sciences and diagnostics industry, which last year accounted for 36 percent of its revenue, according to Brandon Couillard, a New York-based analyst at Jefferies Group LLC.

After Life The company explored a purchase of Life Technologies Corp. (LIFE), according to people familiar with the matter who asked not to be named because the process was private. Life agreed in April to sell itself to Thermo Fisher Scientific Inc. for about $16 billion, including debt.

Danaher “would like to do more in that area,” Couillard said in a phone interview. “It has long viewed Thermo as a competing bidder for every asset of interest in the space and with them currently tied up with Life, it does give Danaher some advantage in the negotiation process.”

Danaher is a disciplined buyer and with equity markets near record highs, the surging valuations of many potential targets have made dealmaking challenging, according to Nigel Frankson, a Baltimore-based analyst at Brown Advisory Inc., which owns Danaher stock among its holdings.

Buy, Fix “The current environment is probably unfavorable for them,” Frankson said in a phone interview. “As a shareholder of Danaher, I appreciate them not buying something just for the sake of buying something.”

At the same time, Danaher’s specialty is buying companies and applying its management system to boost profitability, he said.

“Danaher can buy a company and fix it and it will be more valuable tomorrow than it is the day they bought it,” Frankson said. “That’s what I want Danaher to do. The value accrued to the shareholder is clear and obvious.”

To contact the reporters on this story: Brooke Sutherland in New York at; Thomas Black in Dallas at

To contact the editors responsible for this story: Sarah Rabil at; Ed Dufner at

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From: richardred9/26/2013 11:10:49 AM
   of 6657

Poplar Partners Begins Search for Potential Acquisitions

September 17, 2013 01:49 PM Eastern Daylight Time
NEW YORK--( BUSINESS WIRE)--Poplar Partners (“Poplar”), a private investment firm led by former KKR executive and recent Stanford Graduate School of Business alum, Alex Gelman, announced today that it has begun its search for acquisition targets. Gelman is backed in this venture by a team of seasoned operators and investors.

“By the year 2025, virtually all closely held and family-owned businesses will lose their primary owner to death or retirement ...Approximately $10.4 trillion of net worth will be transferred by the year 2040...”

After purchasing all or the majority of the company, Gelman will take on a senior operating role, enabling owners to transition away from daily operations. Poplar is targeting companies that have $1.5 - $7 million in annual cash flows and a strong history of growth. Poplar is focused on companies in the business services, healthcare services, IT services, enterprise software, and data analytics industries anywhere in the United States.

The firm’s Founder and Managing Partner, Gelman, received his BA from Dartmouth and MBA from Stanford. Prior to founding Poplar, Gelman was a consultant with McKinsey & Co. and an executive at KKR Capstone, the operating arm of private equity firm Kohlberg, Kravis & Roberts.

Joel Peterson, founder of JCP Capital and Chairman of JetBlue, said “We backed Alex because of his character, hustle, intelligence and focus."

Poplar believes the US economy is in the midst of an enormous inter-generational transition of wealth and is well positioned to help facilitate it. According to Robert Avery at Cornell University, “By the year 2025, virtually all closely held and family-owned businesses will lose their primary owner to death or retirement ...Approximately $10.4 trillion of net worth will be transferred by the year 2040...”

Gelman commented, “We fill a niche that is desperately needed in the market. Our goal is to help small business owners transition their business while maintaining their legacy by providing them with investment capital, a replacement management team, and entrepreneurial energy.”

About Poplar Partners

Poplar Partners is a private investment firm seeking to acquire, actively manage and grow one privately-held company. Poplar is seeking businesses with $1.5 to $7 million in annual cash flows. Poplar is particularly well positioned to be an attractive exit option for business owners who are looking to transition away from day to day operations as Poplar offers both investment capital and management expertise.

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To: richardred who wrote (3356)9/26/2013 11:16:42 AM
From: richardred
   of 6657
HP looking at new round of acquisitions

Meg Whitman. CC image courtesy of Max Morse.

Hewlett-Packard (HP) is looking for acquisitions of up to US$1.5 billion, with its chief executive officer (CEO) Meg Whitman saying purchases will be “part of our future”.

Whitman was speaking to CNBC when she said there could be deals made in the US$100 million to US$300 million price range and added the company was not looking to split up its divisions or sell its assets.

She said: “We don’t need a five or six billion dollar acquisition. I think there are acquisitions in the $100 million, $300 million range, maybe some up to 1 to $1.5 billion that we might be interested in.”

Big purchases made by HP between 2008 and 2011 include Electronic Data Systems, 3Com and big data analytics firm Autonomy, with latter deal since regretted by HP.

Those purchases were all at least US$1 billion deals.

Whitman said: “We will be incredibly measured and disciplined. We are very mindful of the event that we just came off with Autonomy, so don’t worry about that.”

Dave Donatelli, previously head of the Enterprise Group division at HP, will now be tasked with finding early-stage technology companies suitable for acquisition.

Donatelli has been replaced by chief operating officer Bill Veghte.

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To: richardred who wrote (3418)9/26/2013 11:24:38 AM
From: richardred
   of 6657

IBM Acquisitions – Who Is Next? 20 Private Companies to Watch insider With $14.5B set aside for acquisitions until 2015 and a stated desire to do acquisitions of $200M-$1.5B, here's 20 private firms that fit IBM's strategic focus areas. June 4, 2013

  • 2
  • SharebarRumors have been circulating that IBM is eyeing a number of potential multi-billion-dollar M&A targets to boost sales. Five notable publicly-traded names come up frequently: Akamai, Imperva, Juniper Networks, NetApp and Splunk. (Note: We’d successfully predicted the IBM acquisition of Softlayer 1.5 months ago on CB Insider)

    But these rumors seem to be inconsistent with IBM’s recent acquisition history and guidance from the company itself. IBM CFO, Mark Loughridge, recently commented that “The company’s preference is to strike deals valued at $200 million to $1.5 billion.” He added that, “We are not looking at big acquisitions, nor do we want to communicate that we’re looking at big acquisitions.”

    IBM Acquisition History First, a look back at IBM’s recent private company acquisitions highlight IBM’s strategic areas of focus. Sample acquisitions since 2012 include several DevOps-oriented companies (Green Hat, TeaLeaf and UrbanCode) as well as big data analytics plays (StoredIQ, Star Analytics, Vivisimo). Below is a list of IBM’s acquisitions since 2012:

    Given the company’s stated intentions which are largely consistent with the firm’s recent acquisition history and the firm’s goal of doing $20 billion of acquisitions by 2015 (for which they have $14.5 billion of dry powder left per Bloomberg), who are some of the private companies that IBM may want to look at? Which private companies have competitive products and services with the five aforementioned public companies or which might have hybrid cloud technologies, big data analytics or DevOps capabilities consistent with the firm’s areas of focus?

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    From: The Ox9/30/2013 9:16:32 AM
       of 6657
    NLSN acquires Arbitron for $1.3 Billion according to DJ

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    To: The Ox who wrote (3503)10/5/2013 10:04:03 AM
    From: richardred
    2 Recommendations   of 6657
    Which Telecom and Wireless Companies Can (and Cannot) Still Be Acquired?
    What generally happens when industries have only regional providers or merely a whole slew of competitors? Usually it boils down to mergers for size and scale, then outright acquisitions to eliminate competition. We have seen this consolidation in the wireless space with AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), Sprint Corp. (NYSE: S) and T-Mobile US Inc. (NYSE: TMUS). Fitch Ratings recently showed that the four largest U.S. wireless carriers have some 92% of the U.S. market share. The long and short of the matter is that M&A in the U.S. wireless space has seen its heyday. 24/7 Wall St. has compiled a full-spectrum analysis of which wireless and telecom carriers and providers can still be acquired and which ones simply cannot.

    The good news for investors hoping for M&A is that some players do still exist. The bad news is that these players now all will be considered weaker competitors on their own, meaning that investors have to be very careful if they want to buy a company based only on its own merits and opportunity.

    We agree with Fitch Ratings in its belief that few material targets remain when operators and spectrum holdings are considered. We also operate under the same belief as Fitch that the Federal Communications Commission (FCC) would restrict any further material consolidation among the top wireless carriers. So the real question, and opportunity, outside of the wireless carriers is where else to look for M&A.

    One such move that Fitch expects in the near term would be that Dish Network Corp. (NASDAQ: DISH) will make a wireless strategy move within the next few months, and according to outsiders it would likely be in some form with T-Mobile US Inc. (NYSE: TMUS). Fitch said, “Activity around DISH could be the most significant near-term wireless industry consolidation event.”

    Elsewhere, Fitch believes that the 578 to 698 MHz TV spectrum auction could occur around 2015 or 2016, and that auction alone could represent the largest single acquisition event for the industry over the foreseeable future. Unfortunately, that leaves no room for investors because you cannot invest in the government nor in the FCC. Another hopeful from Fitch is some or all the LightSquared L-band spectrum.

    So, what other mergers are there in the near term or long term? We would point out that AT&T Inc. (NYSE: T) was blocked in its acquisition of T-Mobile US Inc. (NYSE: TMUS).

    The Verizon Communications Inc. (NYSE: VZ) deal with Vodafone Group PLC (NYSE: VOD) is the largest deal and has been years in the making. Now Verizon gets to own effectively all of Verizon Wireless. One fear of 24/7 Wall St. is that Verizon may have to work on its leverage now rather than continue to pursue annual dividend hikes.

    The end of M&A may take away oomph for the quick in and out traders and may limit special situation investing. The good news is that this could be the best thing in the world for dividend-hungry investors. Fitch was specific to say that the end of the M&A cycle will bring steadier financial trends and called it a consolidated and maturing marketplace.

    24/7 Wall St. has gone back over the telecom and wireless operators that are left. There are still some potential acquisition candidates, but our focus revolves around who can close a regional dominance gap or who can bring other spectrum assets or other lesser-known assets to the table. Here are some of the possibilities after some freshly closed and pending transactions.

    Atlantic Tele-Network Inc. (NASDAQ: ATNI) offers wireless and wireline telecom services in North America, Bermuda and the Caribbean. Its ALLTEL spectrum and customers are under an acquisition of AT&T right now and after the FCC forced Verizon to sell coverage areas in Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho. The company’s current market value is a mere $760 million.

    Leap Wireless International Inc. (NASDAQ: LEAP) is being taken into the AT&T empire as well. MetroPCS Communications also was acquired by T-Mobile. Virgin Mobile was acquired by Sprint, long before Softbank gobbled up Sprint Nextel and Clearwire.

    United States Cellular Corp. (NYSE: USM), which is effectively under Telephone & Data Systems Inc. (NYSE: TDS), has been a name up for grabs before. Sprint Corp. (NYSE: S) is closing down its acquired portion of the U.S. Cellular network by the end of October. U.S. Cellular has been speculated as a buyout name in the past, and perhaps it could be again with a $3.65 billion market value. TDS has a market value of $3 billion. How a merger would work here is likely a two-step process, as U.S. Cellular is a majority-owned subsidiary of TDS.

    Cincinnati Bell Inc. (NYSE: CBB) is one that we have considered a possible target for years, but now that may be complicated with its recent data center spin-off of Cyrusone Inc. (NASDAQ: CONE). The market value for Cincinnati Bell is only $612 million. Its Wireless segment is only a part of the company and is a licensed service territory serving Greater Cincinnati and Dayton, Ohio, and areas in northern Kentucky and southeastern Indiana.

    Shenandoah Telecommunications Co. (NASDAQ: SHEN) is also a broader telecom outfit with a small footprint. Its total market value is only $418 million, and its wireless segment provides digital wireless service to a portion of a four-state area covering the region from Harrisburg, York and Altoona in Pennsylvania to Harrisonburg in Virginia. At the end of 2012, it owned some 150 cell site towers and had 216 leases with wireless communications providers.

    There are two regional players specific to Alaska: General Communication Inc. (NASDAQ: GNCMA), worth some $369 million, and Alaska Communications Systems Group Inc. (NASDAQ: ALSK), worth a mere $127 million. Is a deal possible in Alaska, or does anyone want to bother? If so, the dealmakers might want to consider closing on it during the summer when it is not so cold and when they have almost endless daylight to work on it.

    Would any acquirer want to go after CenturyLink Inc. (NYSE: CTL) or Windstream Corp. (NYSE: WIN) for their multitude of telecom and communications assets? We doubt it, based on things the way they are today, but by now everyone knows that any company could be a player or a target. CenturyLink is worth almost $20 billion, while Windstream is worth almost $5 billion.

    Two names that have dropped off the M&A radar and possible rumor mills are Vonage Holdings Corp. (NYSE: VG), valued at $665 million, and magicJack VocalTec Ltd. (NASDAQ: CALL), valued at $250 million. These are VoIP telecom players rather than wireless targets, but a telecom acquirer could suddenly take in millions of fixed-line accounts here. You know the bulk of each’s customer base also owns cellphones. magicJack most recently had an estimated 3.36 million active MJ subscribers and about 4.37 million app users, while Vonage recently claimed about 2.3 million subscribers.

    Hawaiian Telcom Holdco Inc. (NASDAQ: HCOM) is worth a mere $263 million, but wireless is a tiny portion of its business and this may fall under the same sort of local risks for a possible buyer that the Alaskan companies are in as well. The footprint may simply be too small to matter, and state laws and taxation are possible risks. This company is actually now in the midst of making a small data center acquisition of its own.

    BlackBerry Ltd. (NASDAQ: BBRY) cannot be left out, even if it is a handset maker and patent owner rather than a carrier. The company is under strategic review right now, and frankly it has to hope for a buyout because it is simply too problematic to recapture its former glory for its current management team. BlackBerry’s market cap is still less than $6 billion, now that its stock is down so much from its highs.

    We want to conclude with one last possibility in wireless consolidation. The ownership of cellular towers is an industry that has consolidated but still could consolidate further. One name that used to be a potential acquisition was SBA Communications Corp. (NASDAQ: SBAC), even though it actually recently made an acquisition of its own. Its market cap is now $9.6 billion, yet the company keeps having normalized losses and is expected to have losses this year and next year, according to the 16 or so analysts that follow the company.

    Controlling the cell towers is a big business because communities would rather not have more and more towers, and most buildings and high points that cellular towers need are already occupied. American Tower Corp. (NYSE: AMT) has converted to a real estate investment trust (REIT) and is worth $27 billion, even as shares are close to a 52-week low and down almost 20% from a high. Crown Castle International Corp. (NYSE: CCI) is worth $20 billion, and while not close to a 52-week low the stock is down some 15% from its high.

    So, this proprietary report on “who is left to acquire in telecom and wireless” is something we have considered for quite some time. All you have to do is to consider just how many telecom and wireless mergers have taken place. Our guess is that you could ask a deal counter or someone who has had to rubber stamp mergers at the FCC and Department of Justice and they would merely say “too many to count.” Here are just some of the many telecom and wireless companies that have been acquired: Nextel, ALLTEL, Arch Wireless, Cingular, Qwest, Pac Bell, VoiceStream and on and on.

    When Fitch made its predictions and observations, most of which we agree with, it said:

    The long-term future for regional or small wireless operators is uncertain at best … these operators will continue to face difficulty in remaining competitive with the large nationwide operators. Fitch believes that these operators will eventually be acquired by larger wireless operators. Regardless of the time horizon considered, the consolidation of the wireless industry is nearing an end and future competitive positioning will rely on operating strategies rather than on mergers and acquisitions.

    We have seen some speculation that ultimately a deal could be done in some form between Sprint and T-Mobile, but Fitch effectively has nixed that. If there is one last merger to be done on the larger scale, that likely is it. We simply expect great regulatory fears, and these companies already have had enough network and spectrum integration issues that they may just choose to fight it out for which carrier will jockey for the number three and number four position years into the future.

    Now that the buyout potentials are done, and if AT&T or Verizon are now done in the major M&A game, then the end result is that the post-consolidation phase of wireless and telecom almost certainly leaves more safety of dividends ahead. The telecom and dividend royalty members are AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). AT&T is king of the dividend dance with a 5.3% dividend yield, and Verizon is somewhat further behind as a second prince with a 4.3% yield.

    The telecom and wireless landscape already consolidated massively. There are still some deals to be done on the carrier side, but the reality is that the size of today’s remaining companies simply means that the great mergers likely have already been seen. The finishing note may simply be that dividends from the “solid” telecom and wireless players appear to be ever safer ahead.

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    To: richardred who wrote (3504)10/8/2013 4:25:49 PM
    From: The Ox
       of 6657
    Time Warner Cable Inc. (NYSE:TWC) says it has entered into a definitive agreement with Duke Energy Corporation (NYSE: DUK) and investment funds managed by Alinda Capital Partners to buy DukeNet Communications, LLC for $600 million in cash, including the repayment of debt.

    Message 29156078

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    To: richardred who wrote (2914)10/17/2013 10:17:11 AM
    From: richardred
       of 6657
    SVNT-sold position for loss after filing bankruptcy. I will use the loss as an offset this year. One of the big risks of investing in the pharma business. I bought in originally after the drop on talks of a merger deal that never materialized. KRYSTEXXA hasn't live up to expectations.

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    To: richardred who wrote (3145)10/22/2013 9:07:22 AM
    From: richardred
    1 Recommendation   of 6657
    Bullsyeye today in SYMM- If completed, that makes four successful TO's this year.

    Microsemi to buy time-keeper Symmetricom for $230MMicrosemi agrees to pay $230 million for chip atomic-clock company Symmetricom.

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