Industrials

GE loans injection gives Capital One health boost

12 Aug 2015

The bank is buying the conglomerate’s $8.5 bln portfolio of medical loans. Using them to replace lower-yielding bonds on its books should provide an immediate fillip to earnings. As long as the healthcare industry keeps growing, the 6 pct premium CapOne is paying looks justified.

Finns seize the moment in $6.2 bln crane deal

11 Aug 2015

Finland’s crane maker Konecranes is joining forces with U.S. peer Terex in an all-share merger. The deal stacks up strategically, but the timing is opportunistic for Konecranes. Its shares are up 23 percent in a year, while much bigger Terex has lost 40 percent. 

Buffett’s $37 bln Castparts deal lacks precision

10 Aug 2015

The Oracle’s Berkshire Hathaway is paying 19 times earnings for aircraft components maker Precision Castparts. The acquisition fits Buffett’s mold, but also coincides with cyclical highs in plane orders, stock valuations and M&A. Even for a long-term investor, the timing is odd.

Coca-Cola bottling deal targets irksome tax hiccup

6 Aug 2015

Merging three of the drinks giant’s bottlers could create savings worth around $2.8 billion. The new company may even sell a few more sodas. But an undeniable draw for Coca-Cola Enterprises owners is that after the deal the group will have less need to keep the U.S. taxman sweet.

Fertilizer deal offers investors bountiful harvest

6 Aug 2015

CF Industries’ $6.1 bln bid for most of rival OCI’s businesses comes with $500 mln of cost cuts that over time will virtually pay for the acquisition. The deal should also boost production capacity by 65 pct. Those are some powerful nutrients for shareholders to absorb.

Donnelley proves an old dog can learn new tricks

4 Aug 2015

The 150-year-old printer is splitting in three, spinning off fast-growing services from stodgier publishing. Investors like the deal and the better value it portends. So much so, the only vexing question is whether the firm keeps giving all employees its classic holiday books.

DuPont’s fight against Nelson Peltz rages on

28 Jul 2015

The $50 bln chemical maker may have seen off the pushy billionaire in May, but its shares have since tumbled 20 pct. DuPont now expects lower profit, and dividends from spun off Chemours look shaky. Boss Ellen Kullman soon could find shareholders wondering what might have been.

New York commuter crisis may be good for America

28 Jul 2015

Major delays on some of the busiest rail lines into Manhattan from New Jersey have incited outrage. The overhead wires being blamed are emblematic of the decrepit infrastructure across the country. After so much partisan bickering, this episode could focus minds on funding.

Cement spat is hostile M&A, Chinese-style

27 Jul 2015

The struggle over the $2.7 billion Shanshui chucks lots of Hong Kong corporate finance quirks into the mixer. Dilutive share issue? Check. A long trading halt, lawsuits, and unstable junk bonds? Ditto. It’s a fresh reminder of the risks of investing alongside powerful founders.

Investors are too bullish on $7 bln drinks-can bid

21 Jul 2015

Europe’s trustbuster is looking hard at the planned takeover of UK-based Rexam by Ball of the U.S. That’s unsurprising. The new entity would control around two-thirds of key markets. A deal may yet go through. Still, Rexam shares over-egg the chances of success.   

Brookfield can sail off with Asciano

2 Jul 2015

The Canadian investor wants to buy the Australian ports and rail operator for $6.8 bln. A solid 36 percent premium was enough to get Asciano’s board talking. So shareholders seeking a big sweetener may be disappointed. Part-payment in shares could be the main obstacle.

Breakups, activists presage more industrial M&A

30 Jun 2015

Emerson said it plans to hive off its struggling network power business, a possible prelude to more spinoffs at the $37 bln conglomerate. And Nelson Peltz took a stake in $12 bln rival Pentair, saying he wants management to do deals. It’s more fuel for the mergers fire.

3M’s biggest deal ever sticks safely to program

23 Jun 2015

The $100 bln inventor of Post-it notes is paying $2.5 bln for KKR-owned Capital Safety. The price for the workplace safety equipment manufacturer exceeds 3M’s R&D spend last year, and the valuation is healthy. Even so, it’s a high-growth business that suits a modest M&A strategy.

Rob Cox: Colt failure more mismanagement than guns

16 Jun 2015

The 179-year-old maker of the revolver that won the U.S. West has filed for a fast-track bankruptcy. Sciens, the buyout firm that sucked Colt dry with dividends and fees and now owns its headquarters, is the default bidder. That could mean déjà vu for the gunmaker and lenders.

U.S. homebuilders pour $5 bln slab of common sense

16 Jun 2015

Standard Pacific and Ryland have unveiled a purported merger of equals that actually approximates one. Investors even pushed both stocks up over 5 pct on Monday. The new group needs help from housing markets – but if it’s approved, the deal looks like a solid foundation.

How to tell if Japan’s shareholder love-in is real

15 Jun 2015

Japan Inc. faces unprecedented pressure to get leaner, better-run, and more profitable. Real success means higher returns on equity. First comes a tough AGM season that could embarrass the likes of Sony and Sharp. Then expect more buybacks, stake sales, activism and M&A.

Owners see Johnson value above sum of car parts

10 Jun 2015

It’s not obvious that separating the auto supply businesses will add much value. But shareholders still cheered the news that the $34 bln U.S. industrial group may split up. They could be crediting CEO Alex Molinaroli’s next moves. While he has options, that seems premature.

Canadians add imagination to GE’s buyout work

9 Jun 2015

CPPIB is spending $12 bln to buy the U.S. conglomerate’s mid-market private equity lender. The manager of pensions for half Canada’s population gets both an investment and scope to expand. Assets of C$265 bln allow it to scale in-house rather than paying up for outside managers.

Apollo strains to heed LBO mission control

2 Jun 2015

Leon Black’s private equity shop is paying a headline valuation of 9.4 times EBITDA for specialty chemicals maker OM Group. Side deals will lower the multiple but Apollo’s avowed discipline looks tough in a pricey market. It’s a small buyout that illustrates a bigger industry problem.

German utilities are living on borrowed time

21 May 2015

Berlin is likely to water down a proposed levy on carbon-rich lignite coal plants. But that’s just a short reprieve for stricken legacy utilities like RWE and Vattenfall. Germany’s ambitious climate policies still mean many coal-fired plants will have to go off the grid early.