Top three acquisition, merger deals in focus this week

Highlights

• Caesars Entertainment is selling non-US assets of William Hills to 888 Holdings PLC in a deal worth around £2.2 billion.
• US e-commerce firm Packable to merge with Highland Transcend Partners I Corp, a SPAC company, which will bring the combined value of the new company to US$1.55 billion.
• Assa Abloy is purchasing Spectrum’s home improvement and hardware business for US$4.3 billion in cash. The transaction is expected to complete by the year-end.

Many companies have gone into expansion mode as the covid cloud began to dissipate in recent months. Vaccinations and swift government monetary support have helped restore the confidence of industries battling one of the worst health crises in decades.

Companies are buying enterprises or making SPAC deals for stock listings in the hope of securing a better foothold in markets beyond their national boundaries. The deals are not limited to one country but across geographies.

This week also saw several major announcements from companies following a slew of acquisitions and agreements witnessed over the past few months. 

For instance, Caesars Entertainment's asset sale to 888 Holdings PLC, the e-commerce firm Packable's SPAC merger deal with Highland Transcend Partners I Corp, and Assa Abloy's purchase of home improvement business Spectrum were in focus.

Let’s look at these deals and acquisitions.

Source – pixabay

Also Read: Top five biotechnology stocks to explore that are under US$100

Caesars Entertainment and 888 Holdings PLC

Caesars Entertainment, Inc. (NASDAQ:CZR), an American casino company, on Thursday announced to sell the William Hills' non-US assets to 888 Holdings PLC for £2.2 billion. The net proceeds from the transaction are expected to be around £835mm or US$1.2 billion.

The London-listed 888 Holdings is also into the casino, poker, and online gaming business.

The Gibraltar-based 888 Holdings hopes to gain access to William Hills' 2 million active UK customers and 1,400 betting shops on Britain's high street with the purchase.

Caesars had acquired William Hills for 2.9 billion pounds in April to gain experience in the sports betting business.

The UK firm expects to save around 100 million pounds annually through the deal. The transaction is likely to be closed in the first quarter of 2022 after regulatory approvals.

Also Read: Five battery stocks to watch as the EV market gets all charged up

Packable merger with SPAC Highland Transcend Partners I Corp

E-commerce company Packable announced a SPAC merger deal with Highland Transcend Partners I Corp on Thursday. The value of the new company would be US$1.55 billion.

Packable is a third-party retailer and sells health and beauty products online through Google, Amazon, Walmart, Target, etc.

After the merger, Packable shareholders will hold a 71% stake in the new company, and the balance would be owned by Highland and PIPE investors, with 19% and 11%, respectively.

Packable is planning an NYSE listing under the ticker symbol ‘PKBL.’ The company has earned US$373 million in revenue in 2020 and expects it to reach US$456 million this year.

Also Read: 7 mid-cap consumer service stocks to keep an eye on

After the transaction, the company expects to increase its cash by around US$434 million. The transaction also includes around US$180 million from private investment in public equity (PIPE). The close date of the transaction is not yet confirmed, but a final shareholder approval was awaiting.

Also Read: Five Chinese stocks to watch amid regulatory crackdow

Source – pixabay

Also Read: On Holding AG IPO: All you need to know

Assa Abloy’s purchase of Spectrum

Spectrum Brands Holdings Inc said on Thursday that it would sell its home improvement and hardware business to Swedish firm Assa Abloy for US$4.3 billion on a cash and debt-free basis.

Assa Abloy is one of the world’s biggest lock-makers. The deal would help expand its business in North America. On the other hand, Spectrum will use the proceeds to pay back debts and focus on its pet care, personal care, and home & garden businesses.

The deal is expected to close by the year-end. It is expected to boost Assa Abloy’s consolidated sales and operating earnings by 14% to around US$100 million by 2025, Reuters reported.

Also Read: Top five stocks to explore under US$50        

Bottomline

These deals have grabbed investors’ attention this week. Analysts expect more such acquisitions, deals, and mergers to occur in the coming months as businesses gear up for a fresh start post the Covid-19 pandemic.