Post Holdings (POST) took its first step towards separating itself from its Active Nutrition business, BellRing Brands (BRBR), by IPOing a 26% stake on the NYSE (Oct 17th). Even though the IPO came in below the lower end of the projected range, POST raised $480m to help reduce its debt ahead of its mid-April 2020 Spinoff of the rest of the 74% stake. While BRBR is off to an auspicious start, historical IPO-Spin trends have not been in favor of investors as we explore further in our Edge Alert.
18 Oct 2019
After a strategic review over the past few months on what to do with its 80.5% stake in Match Group, Inc. (MTCH), Barry Diller-led media holding company IAC/InterActiveCorp. (IAC) has filed a Form 13D with the SEC demonstrating the first step in distributing its entire stake in MTCH to shareholders. While this isn't a formal announcement, as it still requires board approval, we expect this is a beneficial transaction for both IAC and MTCH shareholders, judging by Diller's portfolio of Spins.
11 Oct 2019
In preparation of the presumed release of its initial prospectus over the next few weeks for more clarity on its Q1 2020 Reverse Morris Trust transaction, we explore further into Ingersoll-Rand Plc (IR) and Gardner Denver (GDI). With the market paying special attention to these pure-play climate businesses via their Spinoffs, IR holds the playbook to create another successful Spinoff like Allegion Plc (ALLE, +53% return over 2 years) in 2013. Full Analysis coming out shortly.
11 Oct 2019
Our analysis on Nuance Communications, Inc.'s (NUAN) Spinoff of Cerence, Inc. (CRNC) indicated selling pressure dynamics on the newly listed company, given its debt load and wide distribution ratio (1:8). As anticipated, CRNC saw as much as -19% from its listing price, finally settling on -14% at the close. Read on for further clarity on these dynamics. Meanwhile, Parent NUAN is now a more nimble healthcare and enterprise AI software company with benefits to come from the ongoing restructuring.
03 Oct 2019
Ensign Group (ENSG, Parent) has completed its second Spinoff in five years (after its Spinoff of CareTrust REIT, Inc. (CTRE) in 2014), this time of its home health and hospice segments as well as its senior living operations, Pennant Group (PTNG, Spinoff). In this instance, with no when-issued trading leading into the Spin, limited coverage by the market as well as a surprise entry into the SmallCap 600 Index, PNTG has rocketed out of its mispriced opening price and we see more upside to come.
03 Oct 2019
Despite missing slightly on its sales estimates on September 26's earnings release, ConAgra Brands, Inc. (CAG) saw a share price rally on the day and closed +4% compared to the flat index return. This increase was likely the result of positive shareholder sentiments on the company's improving gross margin and stronger 2H 2019 as guided by the management. The Edge is positive on CAG's continued integration of acquired Pinnacle Foods assets and deleveraging the balance sheet.
01 Oct 2019