As part of a larger internal reorganization, Madrid-based telecommunications player Telefonica SA (TEF SM) announced its plan to Spinoff all of the Latin American operations excluding Brazil, the latter of which (alongside Spain, United Kingdom, and Germany) over 80% of total company revenues. The Spinoff will unify the disparate Latin American operations (including Argentina, Chile, Peru, Colombia, Mexico, Venezuela, Ecuador and Uruguay) into one listed unit.
02 Dec 2019
Back in August 2018, Continental AG (CON GY) announced its plans to perform an IPO-Spin of its Powertrain business to help the German automaker’s market position from slipping further. However, as the automotive industry is pressured to adapt, CON shifted its plan to that of a pure Spinoff (to be called Vitesco Technologies) rather than the IPO-Spin originally proposed. This automotive Spinoff joins several others previously completed in the past couple years, as well as two more coming up.
25 Nov 2019
After an unexpectedly low open price on its listing day (at $6.15), The Ensign Group, Inc.'s (ENSG) Spinoff of The Pennant Group, Inc. (PNTG) has gone on to return +290% to date, mirroring the successful playbook used in ENSG's previous 2014 Spin of CareTrust REIT, Inc. (CTRE). Following their first earnings since the separation, our valuations indicate the positives resulting from the Spinoff have been priced in, and we therefore recommend booking profits at current levels.
20 Nov 2019
KAR Auction Services, Inc. (KAR) and IAA, Inc. (IAA) have continued their performance divergence since their split in June 2019, with the Spinoff (IAA) demonstrating its strong growth potential while the parent (KAR) has taken hits on its second earnings miss in a row on the back of a $5m inventory loss and lowered guidance. KAR's longer-term catalysts are still intact for those willing to wait, and IAA is expected to continue with its bolt-on acquisitions and partnerships for the near-term.
19 Nov 2019
Between the index play on listing (leaving the S&P 500 for the SmallCap 600) and taking on debt from parent VF Corp. (VFC) as part of the Spinoff transaction, Kontoor Brands, Inc. (KTB) experienced the predicted selling pressure and dropped to below $30 after its break-up in May 2018. Now, supported by several quarters of beating earnings expectations (even taking near-term headwinds to sustain longer-term growth), the stock has rallied +35% from its June 2018 lows.
18 Nov 2019
Alongside its Q3FY19 earnings results on October 29, Modern Times Group AB (MTGB SS) announced the initiation of a strategic review of its gaming vertical, potentially leading to an additional listing in the United States (currently one of the biggest e-sports markets in the world). This would be the first pure-play e-sports business listed in the United States and widen the gap between MTGB and its peers in the space. Meanwhile, the anticipated launch of 5G will bring in additional revenue.
15 Nov 2019