Author Archives: Inelegant Investor
VF Corp(VFC) will be spinning off its denim business in the first half of next year. The business includes such venerable brands as Wrangler and Lee. So when the company needed a name for the new independent entity, the choice was obvious. Bypassing such staid and uninspired choices as Wrangler or Lee, the company chose Contour. Or rather,… Read More »
Well over a century ago, brothers Gustav, Otto and Edward Mallinckrodt founded a chemical company. Today, the company that still bears their name plans a spinoff to try to recreate some of the value that has been lost in the last few years. Mallinckrodt(MNK) today is a second generation spinoff. Grandfather Tyco executed a spinoff of Covidien in… Read More »
In the latest episode of Tribune Publishing’s(TPCO) long running drama, the company formerly known as Tronc has rejected a $16.50 bid from McClatchy(MNI), Bloomberg reports. After ending its conflict with shareholder Patrick Soon-Shiong by selling him the Los Angeles Times in June for $500 million, the company, mercifully, changed its name back to Tribune Publishing in October. Tribune Publishing… Read More »
Last year, we discussed Pentair’s(PNR) spin off of nVent(NVT) and commented on how much the strange capitalization was likely to add to the value. With the spinoff now set for the end of the month, it turns out that Pentair gave nVent more than just a bad name. As we had speculated, nVent borrowed $1 billion and will… Read More »
It’s a part of the economy that is not visible to many consumers, but if you have ever bought a used car, there is a good chance it passed through KAR Auction Services(KAR) at some point. Last year, the company sold approximately 5.6 million vehicles at auction. KAR consists of two distinct auction businesses. Adesa, its wholecar auction… Read More »
Maybe at Alice’s Restaurant you can get anything you want, but Arlo only makes security cameras. The buisness, which Netgear(NTGR) launched in 2014, had revenue last year of $378 million, compared to $1.03 billion for the rest of the company. This was double Arlo’s 2016 revenue, while the rest of the company is flat. Netgear management, wishing to take… Read More »
Even before Time Warner(TWX) spun it off in June 2014, Meredith(MDP) was in talks trying to effect a Reverse Morris Trust transaction. Over the subsequent years, Time repeatedly was the subject of buyout discussion, and Meredith was always in the mix. Well after five years, Meredith finally got its prize. On January 31, Meredith closed its $2.8 billion… Read More »
Boats, billiard tables and fitness equipment. Three years after the sale of its iconic bowling business, Brunswick(BC) continues to house a diverse and unconnected set of products. When a company is in such disparate businesses, it is only a matter of time before an activist investor comes along, urging a spinoff. That day arrived for Brunswick last week,… Read More »
One year after its Chapter 11 filing and a decade after a private equity buyout, Avaya(AVYA) is, once again, a public company. The company had declared bankruptcy beset by $6.3 Billion in debt and mounting losses. In December, it completed its restructuring and began trading OTC. In January, less than a month later, Avaya stock gained a listing… Read More »
It was just one year ago when Biogen(BIIB) spun off hemophilia and blood disorder specialist Bioverativ(BIVV). With the stock trading in the 40s post-spin, we highlighted some disparate analyst opinions of the spin. The most bullish, Gabelli & Company, has a price target of $58 for Bioverativ stock. This past Friday, Bioverativ stock closed at $64.11, above Gabelli’s… Read More »
Investors are taking gun and ammo manufacturer Vista Outdoor(VSTO) out back and shooting it. Vista stock, which was above $50 in July 2016, was down nearly 30% last week after an awful earnings report, and now trades just over $14. The company, which was spun off in 2015 by Alliance Techsystems as part of its Morris Trust merger… Read More »
Every schoolchild is aware of the dangers of mixing water and electricity. Perhaps with this in mind, Pentair(PNR) will be spinning off its Electric division and retaining its Flow Control division. As every spinoff needs a gut-wrenchingly bad name with an even worse explanation of its meaning, the new company will be known as nVent Electric. Why? Beth… Read More »
Autoliv(ALV) is the world’s largest manufacturer of seat belts and air bags. Now, the Swedish company wants to spin off its fast-growing Electronics business. The Electronics business focuses on Active Safety as opposed to Autoliv’s core Passive Safety business. Autoliv stock jumped over 12% on the announcement, as investors anticipated strong value creation in the Electronics division with… Read More »
In January, under pressure from Elliott Management, Marathon Petroleum(MPC) announced a formal review of the company’s strategic options for its Speedway business. At the time, it seemed that a spinoff was both Elliott’s goal and a likely outcome of the review process. After all, the industry has seen several petroleum companies spin off their convenience store divisions. Marathon… Read More »
Over 18 months since announcing plans to merge, Dow Chemical(DOW) and E. I. du Pont de Nemours and Co.(DD) will complete their merger on August 31. The new company will be named DowDuPont and will trade under the new DWDP ticker. DowDuPont will be included in both the S&P 100 and S&P 500, as were both predecessor companies. Don’t… Read More »