Jumps on Sale Versus Spin, 21% Return Since Entry, Exits MP
Less than 2 months before its Spinoff, HD Supply Holdings, (HDS) announced today that it has opted to sell its Construction & Industrials business (Whitecap) for $2.9bn in cash to PE firm Clayton, Dubilier & Rice instead of Spinning it off to shareholders. Having entered our Model Portfolio in the lead up to the Spinoff, now that the short-term catalyst is gone and having generated a +21% return since our entry in June, we’ll be exiting HDS at the end of today’s (Aug 11, 2020) VWAP.HD Supply Holdings is a holding company. Through its subsidiaries, the company is an industrial distributor in North America. The company's segments include: Facilities Maintenance and Construction and Industrial. The company's Facilities Maintrnance segment distributes maintenance, repair and operations products, provides services and fabricates custom products. Products include electrical and lighting items, and plumbing, heating, ventilating, and air conditioning products. The company's Construction and Industrial segment distributes hardware, tools and materials to non-residential and residential contractors. Products include tilt-up brace systems, forming and shoring systems, concrete chemicals, and cutting tools.
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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