Benzinga'a M&A Chatter for Monday August 20, 2012
The following are the M&A deals, rumors and chatter circulating on Wall Street for Monday August 20, 2012:
Aetna to Acquire Coventry Health Care
Aetna (NYSE: AET) and Coventry Health Care (NYSE: CVH) announced Monday that they have entered into a definitive agreement pursuant to which Aetna will acquire Coventry in a transaction valued at $7.3 billion, including the assumption of Coventry debt.(1) Coventry is a diversified managed health care company that offers a full portfolio of risk and fee-based products, including Medicare Advantage and Medicare Part D programs, Medicaid managed care plans, group and individual health insurance, coverage for specialty services such as workers' compensation, and network rental services. The acquisition is projected to add nearly 4 million medical members and 1.5 million Medicare Part D members to Aetna's membership. On a pro forma basis, the transaction increases Aetna's share of revenues from Government business to over 30 percent from 23 percent currently.
Under the terms of the agreement, which has been approved by the board of directors of each company, Coventry stockholders will receive $27.30 in cash and 0.3885 Aetna common shares for each Coventry share, or $42.08 per share, based on the closing price of Aetna common shares on Friday, August 17, 2012. Aetna expects to finance the cash portion of the transaction with a combination of cash on hand and by issuing approximately $2.5 billion of new debt and commercial paper. Excluding transaction and integration costs, the transaction is projected to be modestly accretive to Aetna's operating earnings per share (2) in 2013, $0.45 accretive in 2014 and $0.90 accretive in 2015.
Coventry Health Care closed at $42.04, a gain of 20.32% on 17 times average volume.
A. Schulman Announces Acquisition of ECM Plastics
A. Schulman (NASDAQ: SHLM) announced Monday that it has signed a definitive agreement to acquire ECM Plastics, Inc., a privately owned, leading plastics compounder located in Worcester, Massachusetts, for $36.5 million. ECM Plastics, Inc. generates approximately $40 million in annual sales. After expected synergies, operating margins are projected to exceed 10%, with operating profit per pound to surpass 15 cents. The transaction is expected to close in early September pending the completion of closing requirements.
A. Schulman closed at $24.19 Monday, a gain of 1.17% on twice average volume.
Another Celgene for Dendreon Rumor
The maker of Provenge would not comment on this latest rumor, a Celgene spokesperson was not available.
Dendreon closed at $5.18 Monday, a gain of 4.86% on 1.5 times average volume.
Forest Oil Not Interested in Sale
Forest Oil (NYSE: FST) has turned away potential buyers, according to DealReporter. Last Friday the company was mentioned as a takeover target by the same publication.
A Forest Oil spokesperson was not available for comment.
Forest Oil closed at $7.75 Monday, a loss of 3.25% on lower than average volume.
Hearing Renewed Chatter of Seagate Bid for OCZ
Seagate Technology (NASDAQ: STX) is being once again mentioned as a potential buyer of OCZ Technology (NASDAQ: OCZ), according to sources. It was rumored that Seagate was going to announce an acquisition of OCZ during their earnings call on July 30, however that did not materialize.
A Seagate spokesperson declined comment. An OCZ spokesperson was not available.
OCZ Technology closed at $5.33 Monday, a gain of 1.363% on average volume.