Investors Say No Thanks to Overpriced Acquisitions
Merger Monday is back. The market responded by sending shares of these three companies deep into the red.
Sam McBride
M&A Analysis
Sam McBride
United Technologies Overpaid for Rockwell Collins
Simply put, the price UTX will pay for this acquisition – which comes to ~$33 billion when accounting for all forms of debt and unfunded pension liabilities – makes it almost impossible for the deal to create long-term value for shareholders.
Sam McBride
Winner & Losers from Amazon’s Proposed Purchase of Whole Foods
While this deal certainly could be good for AMZN, we believe the market may be ignoring some of Whole Foods Market’s off-balance sheet liabilities that make this acquisition more expensive than it appears.
Sam McBride
The Best Acquisition We’ve Seen in 2016
While we’ve taken issue with many of the large acquisitions in 2016, this deal not only passes the economics test, but also creates a combined firm with a strategic focus on the future.
Kyle Guske II
Why Companies Overpay For Acquisitions
Overpriced acquisitions are far from a new phenomenon, but they’ve been especially prevalent in recent months. As a result, we’ve gathered some ideas about the various reasons companies ignore the evidence and continue to overpay for acquisitions.
Sam McBride
Salesforce.com Investors Lose Big In Demandware Acquisition
Under even the most optimistic integration scenarios, we believe that Salesforce.com’s proposed acquisition of Demandware for $75/share or $2.85 billion represents an unacceptable transfer of wealth from CRM to DWRE shareholders.
Kyle Guske II
Towers Watson Shareholders Are Getting A Raw Deal
Many investors in professional services firm Towers Watson (TW) have viewed the recent merger with reinsurer Willis Group (WSH) as a raw deal for TW shareholders. The crux of their argument comes down to the fact that the value of the deal, based on share prices before the deal was announced, was a ~12% discount to where TW had been trading.
Sam McBride
David Trainer Explains the Right Way to Analyze an Acquisition
In this extended podcast, CEO David Trainer will discuss the right way to analyze the Time Warner Cable and Charter Communications deal and determine whether or not an acquisition creates value.
Kyle Guske II
Weekly Webinar 5/27: A Forensic Analysis of Acquisitions
CEO David Trainer will show the right way to analyze the Time Warner Cable and Charter Communications deal and determine whether or not an acquisition creates value.
Kyle Guske II
Who Wins and Who Loses in Staples’ Acquisition of Office Depot?
Does this acquisition make sense for Staples?
Andre Rouillard
Carl Icahn May Be Fighting A Losing Battle With Family Dollar
Icahn might be able to engineer a sale to DG or someone else that will earn himself and other shareholders a quick profit, but unlocking long-term value will be a much more difficult task.
David Trainer
The Bidding War For Hillshire Is Bad For Investors
Incentive plans that encourage executives to chase short-term growth at the expense of healthy capital allocation make this sort of irrational behavior not just possible, but inevitable.
David Trainer
Winners and Losers In AT&T’s Acquisition of DirecTV
After a few weeks of rumors, on Sunday AT&T (T) confirmed its $95/share offer for DirecTV (DTV). The deal will be part stock and part cash, and is expected to close within 12 months if the deal meets regulatory approval.
David Trainer
The High-Low Fallacy: Don’t Believe the Merger Hype
One of the biggest misconceptions in the investing world is that the merit of an acquisition should be judged by whether or not it is “earnings accretive”. The impact of an acquisition on a company’s accounting earnings is not indicative of its economic value to shareholders.
David Trainer