Friday, February 05, 2016

Solarwinds = Done Deal

It’s nice to see that Solarwinds (Ticker: SWI) buyout by the PE firms: Silver Lake and Thoma Bravo closed today. I added aggressively to Solarwinds this past week as the annualized return was very attractive based on the anticipated closing date of today. I had ~ 29% of my portfolio in Solarwinds. Even though my net gain was only 1.02%, the annualized return (based on the cash hitting my account by 2/10) will be ~21%. The odds was simply so much in my favor after they placed the loan offering, I just could not resist. In this case I was picking up pennies in front of a stalled steam roller.


At February 09, 2016, Anonymous Anonymous said...

about ALR/ABT
I would like to know which risks do you see in this deal with 5.4% spread right now.
ABT much bigger than ALR and with financials.
seem the unique play right now and quite safe as industry

At February 09, 2016, Blogger Money Turtle said...

That are some small product overlap and that's going to take some time to sort out. A second request is likely so it'll take some time to close. The diagnostics sector is very competitive and has a relatively low barriers to entry. I can't see the Fed blocking this deal. I see this deal getting done, but a close in the first half of this year is unlikely.

At February 09, 2016, Anonymous Anonymous said...

So do you think can work to accumulate on the weakness? and what stop you to consider this a good deal and spread?

At February 09, 2016, Blogger Money Turtle said...

I'm conservatively factoring in a close by the end of Q3, which equates to an annualized gain of ~ 8% (net gain of ~ 5.3%). A so so risk arb return... You may see some deal fatigue in this one and may drift a bit lower overtime. I'm looking for annualized gains of ~ 20% for merger arb plays (usually stuff with a bit of hair on it).


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