Updated Edge Study: Trends in Announced Spinoffs in the US (2010-17)
What's Interesting? The Edge Intelligence...In an effort to find unique ideas, we have conducted a study into trends of companies that have announced Spinoffs in the United States between 2010-18.
We have focused on the below key parameters to narrow down the potential ideas for companies that have announced their upcoming Spins:
Market Cap;
Sector analysis;
Sector Landscape;
Identifying Potential Ideas - Resulting from the 3-Step Analysis...
In 2018, there have been 11 companies which have announced it will be doing a Spinoff, either by 2018 or 2019. Out of these, five are Large Caps, five are Mid-Caps and one is Small Cap. Among this, the sector break-up is: Basic Material (1), Consumer Cyclical (3), Consumer Non-cyclical (1), Energy (2), Industrial (3) and Technology (1).
From the list of names on the calendar, we have identified four announced Spinoffs with upside potential leading to their distribution:
EQT Corp. (EQT);
Brunswick Corp. (BC);
Genuine Parts Co. (GPC);
FMC Corp. (FMC);
All four of these names have been evaluated based on Spinoff rationale, management play, the involvement of activist investors, insider buying/selling, sector dynamics and peer comparison. Please see the second half of the attached document for specifics on each company.
Brunswick is a global designer, manufacturer, and marketer of recreation marine products including marine engines, boats, and parts and accessories for those products. The company operates in the following segments: Marine Engine, which manufactures and markets a range of outboard, sterndrive, and inboard engine and propulsion systems under, among other brand names, Mercury, Mercury MerCruiser, Mercury Racing, and MotorGuide brands; and Boat, which manufactures and markets the following types of boats: fiberglass sport boats, cruisers, sport fishing and center-console, offshore fishing, aluminum and fiberglass fishing, pontoon, utility, deck, inflatable, tow/wake, and heavy-gauge aluminum.
EQT is a natural gas production company with operations focus in the Marcellus and Utica shales of the Appalachian Basin.
FMC is an agricultural sciences company. The company provides solutions to growers around the world with a product portfolio fueled by a discovery and development pipeline in crop protection, plant health, and personnel pest and turf management. This combination of technologies includes insect control products based on Rynaxypyr? and Cyazypyr? active ingredients; Authority?, Boral?, Centium?, Command? and Gamit? branded herbicides; Talstar? and Hero? insecticides; and flutriafol-based fungicides. The company's products are used in agriculture to improve crop yield and quality by controlling a range of insects, weeds and disease, as well as in non-agricultural markets for pest control.
Genuine Parts is engaged in the distribution of automotive replacement parts, industrial parts, and business products. The company's reportable business segments are: Automotive, which distributes automotive parts and accessory items and provides inventory, cataloging, marketing, training and other programs to the automotive aftermarket; Industrial, which distributes industrial replacement parts and related supplies such as bearings, mechanical and electrical power transmission products, industrial automation, and hose, among others; and Business Products, which is engaged in the wholesale distribution of a line of office and other business-related products through a customer base of resellers.
The Edge Group - Global Fundamental Catalyst Investing. The Edge provides investors with access to hidden corporate value from Global Special Situations using a pioneering approach to investments. Founded in 2005 by fund management and investment banking professionals to provide high quality, private equity-level research on Global Corporate Divestitures for the benefit of fundamental event-driven, growth and value-oriented investors in this difficult to track, but proven investment space.
The Edge will look to screen and analyze include Spinoffs; Reverse Morris Trusts; Squeeze Outs; Privatizations; Demutualization; Deep Discounted; Rights Issues; Rights Offering; Restructuring; Insider Purchases / Buying Change of Management / CEO Change; Deteriorating fundamentals; Post-Bankruptcy; Reorganization; Tender Offer; M&A Deals; Secondary Offering; Share Swap; Thrift Conversions; Share Buybacks; Activist; Mergers. All analyzed from a fundamental point of view.
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