Wednesday, March 20, 2013

Life Technologies, More Bidders

Life Technologies (Ticker: LIFE) is really starting to look interesting here. Reuters is reporting that Roche (Ticker: RHHBY) and KKR + Hellman & Friedman have joined the auction process for Life Technologies. Roche was a name that I did not expect even though they made a run at Illumina (Ticker: ILMN). Now we have a bunch of private equity and strategic players making a run at this company. I believe a deal will happen and if the strategic buyers really go at it, I can see Life Technologies get taken out in the mid 70’s.

Monday, March 18, 2013

Constellation Brands Update

It looks like the discussion between Anheuser Busch InBev (Ticker: BUD), Grupo Medelo and Constellation Brands (Ticker: STZ) is going well with the Department of Justice. Anheuser Busch and the DOJ requested to postpone litigation until April 9th so the talks can continue. From what I’ve read the tone of the talks have been positive and I see a very high probability that a settlement will be reached. Constellation Brands will be the prime beneficiary as it will gain the licensing of the Modelo brands such as Corona and will acquire a manufacturing facility. I’m still hanging tight to my shares in Constellation Brands and see more upside with an agreement with the DOJ. Constellation Brands currently make up ~ 25% of my portfolio.

Tuesday, March 12, 2013

Life Technologies, Inc. Review

I’m keeping a close eye on Life Technologies, Inc. (Ticker: LIFE). This is one of my long term holdings as I’ve held this one since its IPO in 1999 at $7.50 per share. The stock is currently trading around $62.74 generating an unrealized gain of ~736% (16.4% annual return since 1999). In any case, private equity and strategic buyers are circling around this company and my bet is that a deal will get done. This company throws off very nice cash flow and its biz is primarily consumable products for life sciences R&D. In another words, it’s a very stable biz. It really is amazing to see this once tiny company in 1999 that was essentially a one product company (selling a cloning kit) to a company that was able to acquire Gibco / Life Technologies and ABI. I don’t want to see this one go, but if the price is right… Anyways, I may add to my position if a deal looks more certain. I expect to see a 7 in the price if a deal was to occur.

Edit: I forgot about the 2 for 1 stock split so my cost basis is actually $7.50 and not $15.00.

Friday, March 08, 2013

Some More Constellation Brands

I sold my position in Zhongpin, Inc. (Ticker: HOGS) today at $12.82 generating a tiny gain and picked up some more Constellation Brands, Inc. (Ticker: STZ) at $44.12. Nothing wrong with Zhongpin, but just wanted to continue to build my position in Constellation Brands. We should be getting some news flow in the next week or two regarding the Justice Department’s decision on the remedy proposed by Anheuser Busch InBev in its acquisition of Grupo Modelo SAB.

Monday, March 04, 2013

Some Zhongpin, Inc. (HOGS)

I picked up a few shares in Zhongpin, Inc. (Ticker: HOGS) today at $12.78. This is one of those Chinese management buyout plays. The take out price for this deal is $13.50 in cash. This deal will probably close by the end of April, but I’m factoring in a conservative close date of May 31st when calculating the annualized return. If all goes well, this should generate a net return of 5.63% (annualized return of 22.77% assuming a May 31st close). This is just a small position (~ 4.5% of my portfolio).