reports
The Corporate Restructuring Report-Harvest Oil & Gas Corp Emerges from...
On 9/20/18, Harvest Oil & Gas Corp. (OTC:HRST) started tradign on the OTC markets after having successfuly completed its restructuring plan and emerging from Chapter 11 bankruptcy on June 4, 2018. HRST, fomerly known as EV Energy Partners, had filed for bankruptcy under Chapter 11 on April 2, 2018. In connection with the Plan, senior note holders received 95% of the reorganized stock, while existing stockholders received 5% equity in the new reorganized company. The plan led to reduction of ~$...
REPORT- Eli Lilly and Company carves-out of its animal health business...
On September 20th, Eli Lilly and Company (NYSE:LLY) completed the carve-out of its animal health business into a separate public company, Elanco Animal Health Inc (ELAN). Lilly retained ~82.3% interest (or 80.2% post underwriter dilution) in ELAN. The IPO was priced at $24/share. In our view, the separation follows a similar move taken by other pharma companies such as Pfizer, which separated its animal business under the name Zoetis. LLY reported strong 2018 earnings and raised its FY18 earni...
Honeywell International Inc. (NYSE: HON) completes Spin-off of its Tra...
On October 1st, 218, Honeywood International Inc. completed the spin-off of its transportation systems business into a separate company, Garrett Motion Inc. The spin-off was tax-free and and announced on October 10th, 2017. The spin-off is in line with management's strategy of shedding non-core businesses. HON expects organic sales growth rate, better segment margin profile and improved cash conversion after the restructuring. We continue to believe the main trigger for the stock will be manag...
Report-ServiceMaster Global Holdings Inc. (SERV) & Frontdoor Inc. (FTD...
On October 1st, 2018, ServiceMaster Global Holdings Inc. (SERV) is set to complete the spin-off of ~80.1% stake in American Home Shield (AHS) Business into a separate public company, Frontdoor Inc. (FTDR). The parent will retain the Terminex (TMX) and Franchise Services Group (FSG) businesses as well as 19.9% stake in FTDR. The spin-off is anticipated to be tax-fee and was announced on July 26th, 2017. The spin-off makes sense given the diverging growth profiles of the two businesses. AHS is gen...
KLX Inc. (KLXI) & KLX Energy Services Holdings Inc. (KLXE) Spin-Off Re...
On September 14th, 2018, KLX Inc. (Nasdaq:KLXI) is expected to complete the spin-off of its Energy Services Group business into a separate public company, KLX Energy Services Holdings Inc. (KLXE). The remaining Aerospace Solutions Group (ASG) business will be sold for ~$4.25 billion to The Boeing Company. The spin-off is anticipated to be taxable and was announced on May 1st, 2018. The spin-off makes sense given the lack of synergy between the two businesses. Also, the energy services segmen...
The Corporate Restructuring Report-Linn Energy Inc. (LNGG) & Riviera R...
On August 7th, 2018, Linn Energy Inc. (OTC:LNGG) completed the spin-off of Riviera Resources Inc. (RVRA). The parent retained its 50% equity interest in Roan Resources LLC, an E&P company focused on MERGE/SCOOP/STACK play in Oklahoma. Riviera's assets comprise: 1) properties located in the Hugoton Basin, East Texas, North Louisiana, Michigan/Illinois, the Uinta Basin and Mid-Continent regions and 2) Blue Mountain Midstream LLC, a midstream company centered in the core of the Merge play in the An...
The Corporate Restructuring Report-Netgear Inc. (NTGR) & Arlo Technolo...
On August 7th, 2018, Netgear Inc. (Nasdaq:NTGR) will complete the carve-out of its Arlo security camera business into a separate public company, Arlo Technologies Inc. (ARLO) via an IPO. The parent will retain ~86% economic interest (or 84.2% post underwriter distribution) in Arlo. The carve-out was announced on Februay 6th, 2018 and makes sense given diverging growth profiles of the two businesses. Arlo is a high growth business vis-a-vis the remaining parent entity. NTGR (ex-ARLO) is a leadi...
The Corporate Restructuring Report-Tidewater Inc. (TDW) Update
On July 16th, 2018, Tidewater Inc. (NYSE:TDW) announced plans to acquire GulfMark Offshore Inc. (NYSE:GLF) in an all-stock deal. Under the terms of the plan, the combined entity will operate under the Tidewater brand and will be led byTDW's CEO John Rynd. GulfMark stockholders will receive 1.1 shares of TDW common stock held. Collectively, GulfMark shareholders will own 27% ownership of the combined company after completion of the combination, or 26% on a fully-diluted basis. he transaction is ...
The Corporate Restructuring Report-Seadrill Limited (SDRL)
On July 2nd, 2018, Seadrill (NYSE:SDRL) emerged from Chapter 11 bankruptcy restructuring. SDRL had filed for bankruptcy restructuring on September 12th, 2017. In connection with the Plan, secured debt holders received ~78.4% of the reorganized stock, unsecured debt holders received ~14.25%, other investors received ~5.5% and existing shareholders received ~1.9% in the new reorganized company. The plan equitized more than ~$3.5 billion in debt and facilitated injection of ~$1.08 billion in liqu...
The Corporate Restructuring Report-nVent Electric Plc (NVT) Update
On April 30, 2018, nVent Electric Plc (NYSE:NVT) was spun off from its parent company, Pentair Plc (NYSE:PNR). In our note dated April18, 2018, we had a positive view on NVT and continue to remain bullish on its prospects. nVent is a pure play electrical business with industry leading brands, attrative margin profile and strong cash flows. nVent noted that its key verticals are all expected to grow in low- to mid-single digits, which should support revenue growth. The company reported solid 1Q...
The Corporate Restructuring Report-DDR Corp (DDR) & Retail Value Inc. ...
On July 1st, 2018, DDR Corp. (NYSE:DDR) is expected to complete the spin-off of a portfolio of 49 assets that includes 37 continental US assets and all 12 of its Puerto Rico assets into a separate publicy traded company, Retail Value Inc. (RVI). The parent will retain the remaining 208 shopping centers. The spin-off is anticipated to be taxable and was announced on December 14th, 2017. The spin-off makes sense as it separates lower growth assets (RVI) from he higher growth assets (DDR). It will...
The Corporate Restructuring Report-Cumulus Media Inc. (CMIA)
On June 4th, 2018, Cumulus Media Inc. (OTC:CMIA) successfully completed its restructuring plan and emerged from Chapter 11 bankruptcy. Cumulus Media had filed for Chapter 11 bankruptcy on November 29th, 2017. In connection with the plan, the secured claim holders received ~83.5% in new reorganized equity, while unsecured note holders received 16.5% in new eorganized equity. The plan led to elimination of ~$1.03 billion in debt. Cumulus Media Inc. is a leading pure-play radio broadcaster with l...
The Corporate Restructuring Report-Altice Europe NV (ATC) & Altice USA...
On June 8th, 2018, Altice NV (ENXTM: ATC) completed the spin-off of its 67.2% stake in is U.S. unit, Altice USA Inc. (NYSE: ATUS). The parent company was renamed Altice Europe NV. The spin-off was tax-free and was announced on January 18th, 2018. Pursuant to the transaction, Altice Europe reorganized its structure comprising Altice France (including French Overseas Territories), Altice International, and a newly formed Altice Pay TV subsidiary. The spin-off makes sense as investors are worrie...
The Corporate Restructuring Report-La Quinta Holdings Inc. (LQ) & Core...
On May 30th, 2018, La Quinta Holdings Inc. completed the spin-off of its real estate assets into a separate public company, CorePoint Lodging Inc (CPLG). The parent retained the hotel franchise and management business and merged with Wyndham Worldwide Corporation. Post-merger, La Quinta ceased to trade on the NYSE and became a wholly-owned subsidiary of Wyndham Hotels & Resorts Inc. The spin-off was taxable and announced on January 18, 2017. The spin-off is in line with similar steps taken b...
The Corporate Restructuring Report-Autoliv Inc. (ALV) & Veoneer Inc. (...
On June 29th, 2018, Autoliv Inc. (NYSE:ALV) is expected to complete the spin-off of its electronic business segment into a separate public company, Veoneer Inc. (VNE). The parent will retain the passive safety business. The spin-off is anticipated to be tax-free and was announced on December 12th, 2017. The spin-off makes sense given little synergies, different capital requirements, and divergent growth rates of the two businesses. The active safety market is growing faster compared to the passi...
The Corporate Restructuring Report-DXC Technology Inc (DXC) & Perspec...
On May 31, 2018, DXC Technology (DXC) completed the spin-off of its US public sector business and subsequently merge it with Vencore Holding Corp and KeyPoint Government Solutions to form a new separate public company, Perspecta Inc (PRSP). The parent will retain the commercial and non-US public sector business. The spin-off is expected to be tax-free and announced on October 11, 2017. The spin-off makes sense given the fact that corporate and public sector businesses have little synergies wi...
Wyndham Worldwide Corporation (NYSE: WYN) completes the spin-off of it...
On May 31st, 2018, Wyndham Worldwide Corporation (WYN) is expected to complete the spin-off of its Hotel Group business into a separate public company, Wyndham Hotels & Resorts Inc (WH). The parent will retain the vacation ownership and vacation exchange businesses and will be renamed Wyndham Destinations Inc. (WYND). The spin-off is anticipated to be tax-free and was announced on August 2nd, 2017. We believe the spin-off of the hotel business makes sense as its simplifies the business struct...
The Corporate Restructuring Report-Spirit Realty Capital Inc. (SRC) & ...
On May 31, 2018, Spirit Realty Capital Inc. (NYSE:SRC) is expected to complete the spin-off of Spirit MTA REIT (SMTA). The spin-off will comprise the assets that collateralize Master Trust 2014 (part of Spirit's asset-backed securitization program), properties leased to Shopko Retail Shops Holding Corp (Shopko) and other assets. The parent will retain the remaining 1,470 properties. The spin-off is anticipated to be taxable and was announced on August 3, 2017. The spin-off aligns the portfoli...
Dover Corporation (DOV) spin off of Apergy Corp (ABY)
On May 9th, 2018, Dover Corporation (NYSE:DOV) is expected to complete the spin-off of its energy business (Wellsite) into a separate public company , Apergy Cop. (APY). The parent will retain the engineered systems, fluids, and refrigeration & food equipment businesses. The spin-off is anticipated to be tax-free and was announced on Decembe 7th, 2017. The spin-off makes sense given that the energ y segment is cyclical and volatile. In our view, the parent should get re-rated towards the mult...
SPIN OFF REPORT: Cannae Holdings Inc. (CNNE) completes carve out of Ce...
On April 26th, 2018,Cannae Holdings Inc. (NYSE:CNNE) announced final pricing of the carve-out of its minority stake in Ceridian HCM Holding Inc (NYSE:CDAY) CNNE will retain ~27.9% interest in Ceridian. The IPO is priced at $22 per share and is expected to be completed on April 30th, 2018. We view the IPO mainly as a move to delever Ceridian's balance sheet. CNNE provides a vehicle to prudently monetize existing investments and make new non-core investments. Post-transaction, CNNE boasts a stron...
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