Many mergers and acquisitions take place across the market, and keeping them all straight can be overwhelming. That’s where I can help.
As investors, you’ll want to stay abreast on all the latest news.
Keeping tabs on mergers and acquisitions is important as these deals can heavily influence your holdings, and you don’t want to be caught unaware — especially during earnings season.
Here are three recently announced deals in different lines of business that are worth knowing.
Avago Technologies Ltd (NASDAQ:AVGO)
Avago Technologies Ltd (NASDAQ:AVGO) recently took the next step in its previously announced tender offer for Emulex Corporation (NYSE:ELX).
Avago Technologies began buying ELX at $8 per share. The offer, which is valued at $606 million, is expected to close in the second half of this year. Avago Technologies’ management expects Emulex Corporation’s connectivity business to be a natural fit for AVGO’s existing enterprise storage products.
In the meantime, Avago Technologies is already experiencing robust sales and earnings growth. For the current quarter, analysts are calling for 133.1% annual sales growth and 134% earnings growth. For fiscal year 2015, the consensus estimate is for 57.6% annual sales growth and 71.4% earnings growth.
AVGO is a “strong buy.”
American Tower Corp (NYSE:AMT)
American Tower Corp (NYSE:AMT) recently announced that it has acquired the rights to nearly 11,500 wireless communications sites from Verizon Communications Inc. (NYSE:VZ).
For $5.056 billion in cash, American Tower Corp now has the exclusive right to lease and operate these towers for nearly three decades. The deal also grants American Tower fixed price purchase options to buy the towers based on their anticipated fair market values at the end of the lease terms.
This acquisition expands American Tower Corp’s portfolio during a time when demand for mobile bandwidth is surging. AMT expects that these new towers will add $410 million in domestic rental and management revenue and will be accretive to earnings after the first full year of operation.
American Tower Corp now has nearly 100,000 towers worldwide and is uniquely positioned to profit from the mobile data boom. Keeping all of this in mind, AMT is a “buy.”
UnitedHealth Group Inc. (NYSE:UNH)
UnitedHealth Group Inc. (NYSE:UNH) rallied after announcing plans to buy Catamaran Corp (USA) (NASDAQ:CTRX) for $12.8 billion.
This is the largest acquisition in UnitedHealth Group’s history. Catamaran is a leading provider of pharmacy benefit management (PBM) services and will be combined with OptumRx, UnitedHealth’s own PBM business.
The transaction, which is expected to close during the fourth quarter of 2015, is expected to add 30 cents per share to 2016 net earnings.
This builds upon UnitedHealth Group’s already strong earnings trajectory. For the current quarter, analysts expect UnitedHealth Group to earn $1.34 per share on $34.58 billion in revenue, which translates to 21.8% annual earnings growth and 9.3% sales growth.
UnitedHealth Group is scheduled to report fiscal second-quarter results before the market opens on April 16. In the meantime, I consider UNH a “strong buy.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
