BLPA’s Rearview Mirror Earnings & the Markets, IPO’s and M&A For the Week Ending June 22, 2014

Rearview Mirror

Earnings & the Markets, IPO’s and M&A

For the Week Ending June 22, 2014

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Red Roses
Red Roses

It’s been a gorgeous start to the summer.  While the weather has not been particularly warm, or dry, the resulting flowers have been spectacular.  The rose bushes have so many flowers that they are bowing under their own weight.  I’ve taken to giving the roses to my appointments, as a kind of sweet, fragrant offering.

Fear not, New Hampshire sun worshipers, warm days lie ahead.  The forecast for this week is highs in the low 80’s.  My stepdaughter will be sure to come home from her summer lifeguard job with a deep amber tan.

Summer time home ventilation is always a test of wills in our house.  My husband loves natural ventilation, enhanced by a fan in every room.  In my office, I prefer air conditioning.  Unless it’s in the 90’s, we call a truce with a mix of whole-house fans, rotating fans, and a portable room air conditioner in my office.  The pugs and I love our Pinguino portable air conditioner.  Who says compromise is dead?

Meanwhile, in Taos, a wonderful guest will be at my home in Taos, hopefully installing my new CenturyLink high speed internet and Ooma VOIP phone system.  My dual knee surgeries with the concomitant physical therapy schedule have limited my mobility, flying or otherwise.  My guest, Scott, is the one guest who I think will accomplish the task easily.  Unflappable, and incredibly gracious.

Earnings and the Market[1]

(Please click on company name for the earnings announcement and the company’s symbol for the stock chart.)

Yes, it’s slow, and it is summer.  Though inflation is playing peek-a-boo with Janet Yellen.  She professes to be unconcerned with May’s 0.4 percent increase in the CPI, which is the third straight increase in as  many months.  To this mathematician, five percent looks a whole lot bigger than the two percent inflation target of the Fed.

As a result, we’ve had a mini-rally in gold, with the precious metal up 9.3 percent for the year.  Gold is trading at $1,312.70 an ounce, from a high of 1,888.70 reached in August 2011.

As for earnings, Oracle (ORCL:  NYSE) came in this quarter with a thud—at 92 cents vs. the expected 95 cents.  Revenue rose to $11.3b from 10.95b.  Apparently, Oracle missed across the board, as the company is being undercut by some of it’s smaller rivals, such as Salesforce and Workday.  Larry Ellison’s net worth is below $3b.

Adobe Systems’(ADBE:  Nasdaq) sales rose 16 percent on increasing subscription sales.  Profit was $88.5m or17 cents per share, up from $76.5m or 15 cents per share.  Revenues increased 5.7 percent to $1.07b.

Adobe and Oracle’s stock charts are mirror images of each other:  Step up.  Step down.

IPOs[2]

(6 IPO’s)

Click on the Company Name for the S-1 filing and the Company Symbol for the stock chart.

Lots of IPOs, most in the biotech/pharma area:

Honeysuckle
Honeysuckle

Financial Information

Markit (MRKT:  Nasdaq) sold 53.5m shares at $24 per share, raising $1.28b at a valuation of $4.3b.  The stock closed the week at $26.95 per share.

Markit is a leading global diversified provider of financial information services. Our offerings enhance transparency, reduce risk and improve operational efficiency in the financial markets. Since we launched our business in 2003, we have become deeply embedded in the systems and workflows of many of our customers and continue to become increasingly important to our customers’operations. We leverage leading technologies and our industry expertise to create innovative products and services across multiple asset classes. We provide pricing and reference data, indices,valuation and trading services, trade processing, enterprise software and managed services. Our end-users include front and back office professionals, such as traders, portfolio managers, risk managers, research professionals and other capital markets participants, as well as operations, compliance and enterprise data managers. We are highly responsive to evolving industry needs and work closely with market participants to develop new products and services.[3]

Biotech

Ardelyx (ARDX:  Nasdaq) sold 4.3m shares at $14 per share, raising $60.2m at a valuation of $240m.  The stock closed the week at $14.50 per share.

We are a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of innovative, non-systemic, small molecule therapeutics that work exclusively in the gastrointestinal, or GI, tract to treat cardio-renal, GI and metabolic diseases.

Kite Pharma (KITE:  Nasdaq) sold 7.5m shares at $17 per share raising $127.5m at a valuation of $619m.  The stock closed the week at $29.79 per share.

We are a clinical-stage biopharmaceutical company focused on the development and commercialization of novel cancer immunotherapy products designed to harness the power of a patient’s own immune system to eradicate cancer cells.[4]

Australia-based Parnell Pharmaceuticals (PARN:  Nasdaq) sold 5m shares at $10 per share, raising $50m at a valuation of $115m.  The stock closed the week at $7.80 per share.

We are a fully integrated pharmaceutical company focused on developing, manufacturing and commercializing innovative animal health solutions. We currently market five products for companion animals and production animals in 14 countries and augment our pharmaceutical products with our proprietary iKAM and mySYNCH®software platforms. [5]

Zafgen (ZFGN:  Nasdaq) sold 6.0m shares at $16 per share, raising $96m at a valuation of $333m.  the stock closed the week at $19.80.

We are a biopharmaceutical company dedicated to significantly improving the health and well-being of patients affected by obesity. Beloranib, our lead product candidate, is a novel, first-in-class, twice-weekly subcutaneous injection being developed for the treatment of multiple indications, including obesity and hyperphagia, or insatiable life-threatening hunger and hunger-related behaviors, in Prader-Willi Syndrome, or PWS, craniopharyngioma-associated obesity, and severe obesity in the general population.[6]

ZS Pharma (ZSPH:  Nasdaq) sold 5.9m shares at $18 per share, raising $106.2m at a valuation of $337m.  The stock closed the week at $28.50 per share.

We are a biopharmaceutical company focused on the development and commercialization of highly selective, non-absorbed drugs to treat renal, cardiovascular, liver and metabolic diseases. Our proprietary zirconium silicate technology allows us to create highly selective ion traps that can reduce toxic levels of specific electrolytes without disturbing the balance of other electrolytes. Our initial focus is on the development of ZS-9, our product candidate in Phase III development for the treatment of hyperkalemia, a life-threatening condition in which elevated levels of potassium in the blood (greater than 5.0 mEq/L) increase the risk of muscle dysfunction, including cardiac arrhythmias and sudden cardiac death.

Mergers & Acquisitions[7]

(10 transactions)

Please click on the highlighted text to read more information on the transaction.

Flowering thyme among the parsley
Flowering thyme among the parsley

Software Tools

Tail-f Systems, which provides network service orchestration technology, is being acquired by Cisco for $175m.

French OpenStack service, eNovance is being acquired by Red Hat for $95m.

SnappyTV, which provides a cloud DVR editor, is being acquired by Twitter.

Streem, which created file systems to deliver cloud-based content, particularly video, is being acquired by Box.

Media/Ads/Analytics

AddVenture, which lets you create a story through branching story lines, is being acquired by Foodpanda/hellofood for $50m.

Data analytics startup, Parastructure, is being acquired by Dropbox.

Multiscreen ad firm, mDialog, is being acquired by Google.

Energy

Silevo, a solar cell innovator and photovoltaic (PV) solar module manufacturer, is being acquired by SolarCity for $200m.

App

New York City-based, Stylr, is being acquired by WalmartLabs.  Stylr is an app which allows you to discover clothes in nearby stores.

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That’s it for now.

All the best,

Margaret Johns

Founder, BlueLake Partners, LLC

 

SiVal_LogoJan Robertson

SiVal Advisors, LLC

 

 

 

 

Bic Stevens

Stevens Capital Advisors

Chartworth2Susan Woods and Vlad Harris

Chartworth, LLC

Margaret Johns is the Founder and Chairman of BlueLake Partners, a boutique M&A investment bank based in the Greater Boston Area.  Prior to founding BlueLake she was an employee founder and Managing Director at Needham & Company where she worked in Corporate Finance in New York City and headed up its Boston office.  She now lives in Londonderry, New Hampshire with her husband, 16 year old step-daughter and three pugs.  When she’s not working with clients, FINRA or writing blogs she competes on the Granite State Penguins Masters Swim Team, skis, rides her bike or is out walking her pugs.

Content researched, edited and reviewed on a best efforts basis.

This newsletter is currently being proofed by Dave Henshaw, which is much appreciated. Dave is my USMS swimming lane mate, and Granite State Penguin team-mate.  He is retired from MIT, where he used to produce and proof their annual financial report.  Exactly what we need.

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We make no claim to being comprehensive in our review, as the contents are companies and topics we, ourselves, find of interest.

[1] WSJ Moneybeat June 15-20, 2014

[2] Renaissance Capital

[3] Company S-1

[4] Company S-1

[5] Company S-1

[6] Company S-1

[7] TechCrunch, WSJ, websites