A roundup of some of the North American equities making moves in both directions
On the rise
Shares of pot company Calgary-based Sundial Growers Inc. (SNDL-Q) jumped on the late Thursday announcement it will acquire Alcanna Inc. (CLIQ-T) for about $346-million.
“Alcanna’s longstanding liquor business provides Sundial with stable cash generation through a mature and proven business model with trailing twelve months free cash flow of $16.4-million on a built-out retail platform,” it said.
Sundial estimates the deal to deliver more than $15-million in additional EBITDA on an annual run-rate basis through synergies and other strategic initiatives.
Shares of Alcanna’s strategic partner Nova Cannabis Inc. (NOVC-T), in which it holds an approximately 63-per-cent equity interest, was lower on the news.
In a research note, CIBC World Markets analyst John Zamparo said: “Sundial’s proposed acquisition of Alcanna comes as somewhat of a surprise, but the business is a strategic fit with SNDL’s existing retail platform— particularly in cannabis—and acquisitive nature. The deal offers only an 8 -per-cent premium vs. [Thursday’s] close, but a much larger 33-per-cent premium relative to September 1, when the letter of intent was signed. Alcanna would, in our opinion, benefit from the inclusion of some cash (rather than all-stock in a notoriously volatile industry) or price protection, but this likely would’ve come with a more modest offer. We believe this deal represents appropriate value for CLIQ investors.”
A day after soaring in its market debut, Vancouver decision analytics software maker Copperleaf Technologies Inc. (CPLF-T) continued to rise.
Shares in the Vancouver decision analytics software maker closed at $22.88, up more than 50 per cent from the issue price of $15, set Wednesday. That gave the company, led by chief executive officer Judi Hess, a market value of $1.78-billion, making it one of the few female-led tech companies in Canada to achieve a 10-figure valuation.
The company raised gross proceeds of $140-million from the offering – the first tech IPO on the TSX since July – following strong demand from investors. Copperleaf drew $1.4-billion in pre-issue orders, a source familiar with the deal said. That was more than 10 times the company’s original offering size of $125-million, which was increased on Wednesday.
- Sean Silcoff
See also: Canadian IPO market heats up as Q4 resumes plans to go public, Copperleaf upsizes offering in face of strong demand
U.S. insurer Chubb Ltd. (CB-N) rose after it agreed to buy health insurer Cigna Corp.’s (CI-N) life, accident, and supplemental benefits businesses in Asia Pacific and Turkey for US$5.75-billion in cash, both insurers said, marking the latest consolidation in Asia’s insurance sector.
In a statement issued late on Thursday, Chubb said it will acquire Cigna’s A&H (accident and health) and life business in South Korea, Taiwan, New Zealand, Thailand, Hong Kong and Indonesia, in addition to Cigna’s 51-per-cent stake in a joint venture in Turkey.
“The addition of Cigna’s business, which is overwhelmingly A&H (accident and health), will rebalance our global portfolio towards this important region,” Chubb CEO Evan Greenberg said.
Chubb said the acquisition will boost Asia’s share of its global portfolio to US$7-billion from about US$4-billion in net premiums written, representing about 20 per cent of the company’s total business, excluding China.
The transaction comes at a time of a shakeup in the insurance sector in key markets.
On the decline
Alimentation Couche-Tard Inc. (ATD.B-T) was down on the premarket announcement of a private agreement with Développements Orano Inc., a corporation controlled by Couche-Tard’s , founder and the executive chairman Alain Bouchard, for the repurchase for cancellation of 6.4 million subordinate voting shares for a total consideration of approximately $300-million.
The repurchase price represents a discount of 2 per cent on Thursday’s closing price and will be paid using cash on hand.
MTY Food Group Inc. (MTY-T) dipped as it recorded an uptick in sales and profits in its third quarter amid a rebound in customer traffic at the company’s restaurants.
The Montreal-based restaurant franchisor and operator said Friday the positive results come despite ongoing supply-chain issues, labour shortages and temporary restaurant closures due to the COVID-19 pandemic.
MTY reported a third-quarter profit of $24.3-million, up from $22.9-million a year ago. The profit amounted to 98 cents per diluted share for the quarter ended Aug. 31, down from 93 cents per diluted share a year earlier.
Revenue totalled $150.8-million, up from $135.4-million a year ago.
The company behind more than 80 restaurant brands including Thai Express, Tiki-Ming and Tutti Frutti said system sales in Canada were up 29 per cent while system-wide sales across all markets were up 13 per cent.
“We are highly encouraged by our financial results in the third quarter of 2021, which was marked by solid double-digit percentage increases in system sales,” Eric Lefebvre, chief executive officer of MTY, said in a statement.
“This strong financial performance reflects a rebound in customer traffic for many of our brands,” he added. “It was realized in a difficult context of lingering supply-chain issues, labour shortages and the continuing impact of the COVID-19 pandemic, as shown by the business days lost due to temporary closures.”
The company said 456 locations were temporarily closed for at least one day during the quarter, resulting in approximately 19,300 business days lost.
MTY said 139 of its restaurants currently remain temporarily closed as a result of the COVID-19 pandemic.
Dye & Durham Ltd. (DND-T) was lower after it said on Friday it would not opt for any strategic changes including a sale, putting an end to the software maker’s strategic review started in response to a management-led buyout offer.
The company had received a $3.4-billion buyout offer from a management-led shareholder group in May, less than a year after listing on the Toronto Stock Exchange.
A special committee of independent directors, which sought advise from J.P. Morgan and Scotiabank for the review, recommended in its final report that Dye & Durham continue its business strategy of growth through acquisitions, the company said.
The committee was formed to consider the buyout offer and other strategic alternatives including a sale to other parties, merger and sale of select assets.
Dye & Durham makes technology products for legal and business professionals, and has operations in Canada, the United Kingdom, Ireland and Australia.
Tesla Inc. (TSLA-Q) was down in the wake of Chief Executive Elon Musk confirming late Thursday the electric carmaker plans to move its headquarters from Silicon Valley’s Palo Alto, California to Austin, Texas, where it is building a massive car and battery complex.
Tesla joins Oracle, HP and Toyota Motor in moving U.S. headquarters to Texas from California, which has relatively high taxes and living costs. While Silicon Valley also is a hive of development of new ideas and companies, Texas is known for cheaper labour and less stringent regulation.
“I’m excited to announce that we’re moving our headquarters to Austin, Texas,” Mr. Musk told the company’s annual meeting, held in the Texas car factory.
“This is not a matter of, sort of, Tesla leaving California,” he said, saying it plans to increase output from its main California factory and Nevada factory by 50 per cent.
The Fremont, California factory nonetheless is “jammed” and it is tough for people to afford houses in California, he said.
Billionaire Musk himself moved to the Lone Star State from California in December to focus on the electric-car maker’s new plant in the state and his SpaceX rocket company, which has a launch site in the southern tip of Texas.
Mr. Musk had a rocky relationship at times with California, threatening to move Tesla headquarters and future programs to Texas during a row over the closure of Tesla’s factory in Fremont, California due to COVID-19, for instance.
With files from staff and wires