I loved it. I was just playing along.^ There goes my trying for a Simpsons reference in the thread. Back to the serious stuff...
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So Express Scripts is likely to receive a takeover bid?
Any finance guys care to explain this one?
http://www.bizjournals.com/stlouis/morn ... idate.html
Any finance guys care to explain this one?
http://www.bizjournals.com/stlouis/morn ... idate.html
^I don’t know. I have been racking my brain ever since I read the articles on stltoday, St. Louis Business Journal as well as the Morgan Stanley press release.
Not that EXS couldn’t continue to trim the fat after a suitor's acquisition, however, I think it is way too soon for a tender offer because EXS is still in the midst trimming excess assets from Medco as well as downsizing management and employees. Plus, EXS is working on improving its bottom line and shareholder value. I could be very wrong, but I think a trimmer EXS would be more attractive to a suitor.
The Morgan Stanley press release listed a number of health care firms that could receive tender offers in 2013. From that, my hunch is that Obamacare is going to start a wave of corporate health care consolidations. So why not have the largest pharmacy benefit manager (PBM) in the country in your portfolio?
However, who is large enough to takeover EXS? Walgreen? Cardinal Health? From the Walgreen’s angle....CVS – a Walgreen competitor - bought Caremark – a PBM. The merger created CVS Caremark. Is Walgreen flush enough with cash to buy EXS or vice versa? And Cardinal Health already owns St. Louis-based Medicine Shoppe International – the largest franchisor of retail pharmacies.
Considering that United Healthcare has relaunched its own PBM, what large health care insurer wouldn’t want EXS in their portfolio to compete with United Healthcare? Aetna? Cigna? Wellpoint? I don’t know. Here's a list of the largest health care insurers. And now that Costco is getting into the PBM industry, competition seems to be heating up in the PBM industry.
With all of the regulatory difficulties it faced during merger hearings, I think that EXS has hit a PBM acquisition brick wall. There is no way it could acquire another PBM without problems – and I don’t believe another PBM could acquire EXS UNLESS Express Scripts unloaded more assets.
The logical pursuer would be a large health care insurer. OR to thwart a takeover EXS could go after a health care company. OR EXS could go after a retail drug chain such as Rite-Aid in order to keep itself standing alone. Walgreen and Rite-Aid are the lone standing big retail drug stores left. Here's a list of the largest drug stores. EXS could expand Rite-Aid into untapped markets in the Central Plains and the U.S. Southwest.
But even a takeover of a drug store chain is likely to be an uphill regulatory climb for EXS - especially considering New Jersey politicos are angry that EXS has been slashing jobs there after the Medco acquisition. Governor Chris Christie has been very meddlesome in EXS's business.
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Rite Aid locations map
Not that EXS couldn’t continue to trim the fat after a suitor's acquisition, however, I think it is way too soon for a tender offer because EXS is still in the midst trimming excess assets from Medco as well as downsizing management and employees. Plus, EXS is working on improving its bottom line and shareholder value. I could be very wrong, but I think a trimmer EXS would be more attractive to a suitor.
The Morgan Stanley press release listed a number of health care firms that could receive tender offers in 2013. From that, my hunch is that Obamacare is going to start a wave of corporate health care consolidations. So why not have the largest pharmacy benefit manager (PBM) in the country in your portfolio?
However, who is large enough to takeover EXS? Walgreen? Cardinal Health? From the Walgreen’s angle....CVS – a Walgreen competitor - bought Caremark – a PBM. The merger created CVS Caremark. Is Walgreen flush enough with cash to buy EXS or vice versa? And Cardinal Health already owns St. Louis-based Medicine Shoppe International – the largest franchisor of retail pharmacies.
Considering that United Healthcare has relaunched its own PBM, what large health care insurer wouldn’t want EXS in their portfolio to compete with United Healthcare? Aetna? Cigna? Wellpoint? I don’t know. Here's a list of the largest health care insurers. And now that Costco is getting into the PBM industry, competition seems to be heating up in the PBM industry.
With all of the regulatory difficulties it faced during merger hearings, I think that EXS has hit a PBM acquisition brick wall. There is no way it could acquire another PBM without problems – and I don’t believe another PBM could acquire EXS UNLESS Express Scripts unloaded more assets.
The logical pursuer would be a large health care insurer. OR to thwart a takeover EXS could go after a health care company. OR EXS could go after a retail drug chain such as Rite-Aid in order to keep itself standing alone. Walgreen and Rite-Aid are the lone standing big retail drug stores left. Here's a list of the largest drug stores. EXS could expand Rite-Aid into untapped markets in the Central Plains and the U.S. Southwest.
But even a takeover of a drug store chain is likely to be an uphill regulatory climb for EXS - especially considering New Jersey politicos are angry that EXS has been slashing jobs there after the Medco acquisition. Governor Chris Christie has been very meddlesome in EXS's business.
Rite Aid locations map
May they have continued success!
StlToday.com - Coolfire buys LA production company
StlToday.com - Coolfire buys LA production company
http://www.stltoday.com/business/local/ ... jg.twitterCoolfire Originals has acquired Wild Eyes Productions, a Los Angeles-based production company.
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I would assume that Morgan Stanley's hypothesis has to do with how Express Scripts has just completed such a large takeover with Medco, spending so much cash to acquire the company that ESRX is now susceptible to an outside entity coming in and acquiring the whole thing, probably not a competitor company but a private equity firm (or series of firms) with enough cash and available financing to buy the whole thing outright.moorlander wrote:So Express Scripts is likely to receive a takeover bid?
Any finance guys care to explain this one?
http://www.bizjournals.com/stlouis/morn ... idate.html
Personally, I doubt this, as ESRX has had enough cash reserves to balance itself out throughout this acquisition and integration. And with a market cap of $43.96B, it sure would be expensive to acquire it, prohibitively so under all but the most extreme circumstances. Plus, there’s so much growth in smaller companies that I see more PE being focused on small and mid cap companies rather than a mega cap like ESRX. General market momentum points towards growth opportunities on which to capitalize preferable to the revenue streams of established acquisition targets. They haven’t gone through all these efforts to merge these two giant corporate operations just to be easily torn asunder by an outsider.
The sheer cost of such an acquisition makes me wonder whether this report is just the conclusion of a Morgan Stanley quantitative assessment of all large cap stocks out there without consideration of the qualitative factors behind such companies’ operations…
Yeesh, did I just type that?
Rephrase: I bet they’re just making guesses without taking the time to know the whole story here.
Arch City: Great assessment there, my compliments to your macro look at the health care markets.
I agree and that's precisely my point too. What company could afford Express Scripts - which at this time is the "Wal-Mart" of PBMs. It is also now the "Wal-Mart" of all health care companies with $116.2-billion dollars in revenue for 2012. (Source)gone corporate wrote:And with a market cap of $43.96B, it sure would be expensive to acquire it, prohibitively so under all but the most extreme circumstances.
The sheer cost of such an acquisition makes me wonder whether this report is just the conclusion of a Morgan Stanley quantitative assessment of all large cap stocks out there without consideration of the qualitative factors behind such companies’ operations…
Arch City: Great assessment there, my compliments to your macro look at the health care markets.
With that level of revenue EXS would have been #13 on last year's F500 list.
Further, although anything is possible and stranger things have happened in business, there's no way federal regulators would let another PBM takeover EXS or vice versa. I just don't see that happening.
So what does that leave as potential suitors? As mentioned, health care insurers. Unless McKesson has added significant revenues since last year, EXS IS the largest health care company so who could gobble up EXS?
I like the private equity angle too. But which one's and why? Blackstone? TPG Capital? What about the public holding companies such as Berkshire? Why EXS? Why not a smaller firm that's a competitor of EXS? Private equity firms typically pump money into acquired firms in order to build them up before spinning them off for a profit. There's no need to do that with EXS as it is not struggling.
This is not a sloppily-run sitting duck company. George Paz runs a pretty tight ship over at EXS and EXS has paid back over $1.1-billion in debt and has generated nearly $2-billion in cash flow over the last nine months. (Source)
The same source suggests that EXS stands to profit from Obamacare.
I don't work in finance, but the more I think about it, like you, the more I have my doubts. I still think that EXS needs to diversify its holdings though. Perhaps I am dreaming, but it seems to me EXS had better get the books in order fast so that it can grow by acquiring a health care firm - either an insurer or a lab firm i.e. Lab Corp or Quest Diagnostics.
BTW, thanks for the compliment. I follow business everyday - and not just St. Louis business. I love all the business channels too.
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The CEO of StL based Bunge North America has been picked to take over the spot at Bunge LTD according to today's Biz Journal.
Pure speculation on my part, but it would sure be nice to see this result in the corporate headquarters heading to StL.
Bunge LTD (BG)
Mkt Cap - $11.6B
Location - White Plains, NY
Pure speculation on my part, but it would sure be nice to see this result in the corporate headquarters heading to StL.
Bunge LTD (BG)
Mkt Cap - $11.6B
Location - White Plains, NY
^That would be nice.
He's only been CEO of Bunge North America since 2010, but let's hope Soren Schroder has good roots established in St. Louis - i.e. nice home, community involvement, church or synagogue etc.
Read about him here and here.
BTW, I have never understood how White Plains, NY could be home to such a large food company so far away from America's heartland when so many of the world's largest food, grain and ingredient companies are based in the Midwest.
With Monsanto, Solae, Post Foods, AB-InBev, International Ingredient Corporation etc. based in St. Louis along with its proximity to Chicago (Chicago Mercantile Exchange), Decatur, Illinois (ADM) and Minneapolis (Cargill), St. Louis would be a better location/fit for Bunge Ltd., I think.
But where would Bunge North America be headquartered?
Either way, it is time for local leaders - political and business - to start dangling carrots (ie. recruiting) for the world headquarters.
What's to lose? They have until June.
He's only been CEO of Bunge North America since 2010, but let's hope Soren Schroder has good roots established in St. Louis - i.e. nice home, community involvement, church or synagogue etc.
Read about him here and here.
BTW, I have never understood how White Plains, NY could be home to such a large food company so far away from America's heartland when so many of the world's largest food, grain and ingredient companies are based in the Midwest.
With Monsanto, Solae, Post Foods, AB-InBev, International Ingredient Corporation etc. based in St. Louis along with its proximity to Chicago (Chicago Mercantile Exchange), Decatur, Illinois (ADM) and Minneapolis (Cargill), St. Louis would be a better location/fit for Bunge Ltd., I think.
But where would Bunge North America be headquartered?
Either way, it is time for local leaders - political and business - to start dangling carrots (ie. recruiting) for the world headquarters.
What's to lose? They have until June.
According to SEC filings here and here, it appears that the combined companies of St. Louis-based United Seating and Mobility and Connecticut-based ATG Rehab will create a $500-million firm to be based in St. Louis.
The St. Louis Business Journal wrote about in its weekly edition.
If my sleuthing turns out to be correct, this firm will turn out to be the largest medical mobility equipment firm in the country.
The St. Louis Business Journal wrote about in its weekly edition.
If my sleuthing turns out to be correct, this firm will turn out to be the largest medical mobility equipment firm in the country.
Still technically based in St.Louis, minus the top level executives.
Charter to Buy Optimum West
http://online.wsj.com/article/SB1000142 ... lenews_wsj
Charter to Buy Optimum West
http://online.wsj.com/article/SB1000142 ... lenews_wsj
Charter Communications Inc. CHTR +0.05% confirmed Thursday it will buy Cablevision Systems Corp.'s CVC -0.86% western cable systems, known as Optimum West, for $1.625 billion.
Cablevision shares rose 6% Thursday after earlier reports of an imminent deal.
Cablevision bought Optimum West just two years ago for $1.4 billion. At the time, Cablevision's chief operating officer was Tom Rutledge, who left the company in late 2011 to become chief executive of Charter. In a statement Thursday, Mr. Rutledge said Cablevision had grown Optimum West's customer base "through the execution of a product and service strategy, which is the same as the one we recently implemented at Charter."
Optimum West, which operates through a Cablevision subsidiary called Bresnan Broadband Holdings LLC, provides television, high-speed Internet and other communication services to roughly 360,000 customers in Western U.S., including Montana, Colorado, Wyoming and Utah. A Charter spokeswoman said that Bresnan's systems will have synergies with other Charter regions because they cover smaller and midsize communities rather than big urban markets.
In contrast, for Long Island-based Cablevision, buying Bresnan roughly two years ago was a strategic and operational shift. Bresnan's cable systems were located across the country from Cablevision's densely concentrated New York metro market. One of Cablevision's big strengths has always been that it is regionally clustered, which has allowed it to be efficient in marketing and in deploying services like digital cable and cloud-based digital video recording faster than other cable operators.
Cablevision said Thursday that it had bought the systems at the time because it had seen the opportunity to increase the value of them by making operational improvements. In 2010, Cablevision had outbid several private-equity firms and rival cable companies, including Charter and Suddenlink Communications, to purchase the Western systems from an investment group led by Providence Equity Partners.
Charter and Cablevision said they expect the deal to close in the third quarter of this year.
Luxco recently purchased a portfolio of brands that generate annual sales of about $30 million from Beam Corp. for $65 million.
http://www.bizjournals.com/stlouis/news ... -beam.html
http://www.bizjournals.com/stlouis/news ... -beam.html
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Here's another one...
Bloomberg: Stifel Is Buying Knight Capital Group's Debt Brokerage Unit
Source: http://www.bloomberg.com/news/2013-02-2 ... ncial.html
This could be very significant. Background is that Knight Capital's work focuses on being a principal market maker and clearing trades for other firms. Last August, Knight suffered a MAJOR technology breakdown which led to mispricing of multiple companies on the exchanges. That lead to Knight almost going out of business within days of the mispricings. However, a handful of firms stepped up to back the company with short-term capital as it got its technology house in order. Mostly, this was done by Private Equity firms, but it also included Stifel, which clears some of its trades on Knight's platforms. The majority of Knight is already being bought out by another company: Getco, LLC.
What Stifel is acquiring is another niche practice focused on debt securities (think: bonds). These include investment-grade debt, high-yield (aka junk bonds), and asset-backed & mortgage-backed securities in both the US and Europe. It's a solid piece of business for Stifel to have and does a lot to position the company as a growing major contender, let alone the best regional brokerage in the US.
Bloomberg: Stifel Is Buying Knight Capital Group's Debt Brokerage Unit
Source: http://www.bloomberg.com/news/2013-02-2 ... ncial.html
This could be very significant. Background is that Knight Capital's work focuses on being a principal market maker and clearing trades for other firms. Last August, Knight suffered a MAJOR technology breakdown which led to mispricing of multiple companies on the exchanges. That lead to Knight almost going out of business within days of the mispricings. However, a handful of firms stepped up to back the company with short-term capital as it got its technology house in order. Mostly, this was done by Private Equity firms, but it also included Stifel, which clears some of its trades on Knight's platforms. The majority of Knight is already being bought out by another company: Getco, LLC.
What Stifel is acquiring is another niche practice focused on debt securities (think: bonds). These include investment-grade debt, high-yield (aka junk bonds), and asset-backed & mortgage-backed securities in both the US and Europe. It's a solid piece of business for Stifel to have and does a lot to position the company as a growing major contender, let alone the best regional brokerage in the US.
Kruszewski sure does love a good acquisition. Read an interesting article earlier this month on Stifel, talks about advantages of locating in St. Louis.
http://www.bloomberg.com/news/2013-02-0 ... nches.html
http://www.bloomberg.com/news/2013-02-0 ... nches.html
Great read. Thanks for posting.jlh wrote:Kruszewski sure does love a good acquisition. Read an interesting article earlier this month on Stifel, talks about advantages of locating in St. Louis.
http://www.bloomberg.com/news/2013-02-0 ... nches.html
Despite all of the upgrades going on at Stifel's headquarters, I imagine that Stifel will need new (additional) office space sooner or later. If an expansion ever occurs, I hope they build a development on one of the parking lots along North Broadway.
^Maybe in the meantime they could move a department across the street to 505 Washington: Stifel Bank & Trust or another part of the wealth management arm that isn't completely tied up with the brokerage.
I don't think they are out of space in their building. There are still other non-Stifel occupants on some of the floors.
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True. Stifel has plenty of room to expand, and the recent acquisitions haven't brought any new jobs to STL.jakektu wrote:I don't think they are out of space in their building. There are still other non-Stifel occupants on some of the floors.
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^These acquisitions have brought higher revenues, earnings per share, assets under management, and revenues. The company just announced record profits, FY 2012 was 65% higher than FY2011. They're going to keep taking up opportunistic purchases, grabbing the low hanging fruit, and through that grow via aggressive expansion.
It won't be too long until they're no longer considered regional. But, no one really knows when they'll be looking for HQ office space outside of 501 North Broadway. Should that day ever come, it'll be prestigious new construction, big time.
It won't be too long until they're no longer considered regional. But, no one really knows when they'll be looking for HQ office space outside of 501 North Broadway. Should that day ever come, it'll be prestigious new construction, big time.
In order to receive tax incentives/breaks, it was reported in July 2012 that Stifel was planning to increase its "local employee base" by 200. Perhaps all of the jobs were not for downtown?debaliviere wrote:True. Stifel has plenty of room to expand, and the recent acquisitions haven't brought any new jobs to STL.jakektu wrote:I don't think they are out of space in their building. There are still other non-Stifel occupants on some of the floors.
Either way, I know that it would take a while, but I can't help but to think that eventually some of those jobs are going to end up in St. Louis due to pay, cost of living, etc. versus the coasts. Wells Fargo Advisors consolidated in St. Louis for those same reasons.
Most importantly however, I just hope some future CEO doesn't come in and whisk away the HQs to NYC or Chicago.
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The firm is growing organically in STL and some jobs will be moving downtown from the Stifel Bank office in Creve Coeur, but acquisitions like KBW, Weisel, Stone & Youngberg, etc. haven't directly brought any new jobs to STL. In those cases, Stifel is essentially acquiring talent that stays where it's already located - San Francisco, Baltimore, Florham Park, etc. instead of moving to STL. Now, that talent and the additional business it generates for the firm generally does necessitate the hiring of additional support personnel in STL, which is great.arch city wrote:In order to receive tax incentives/breaks, it was reported in July 2012 that Stifel was planning to increase its "local employee base" by 200. Perhaps all of the jobs were not for downtown?
Either way, I know that it would take a while, but I can't help but to think that eventually some of those jobs are going to end up in St. Louis due to pay, cost of living, etc. versus the coasts. Wells Fargo Advisors consolidated in St. Louis for those same reasons.
Most importantly however, I just hope some future CEO doesn't come in and whisk away the HQs to NYC or Chicago.
Stifel currently has somewhere between 50-100 employees working on the top floor of the Deloitte building, who will ultimately be going back to the Broadway/Washington HQ building when interior renovations are complete.
debaliviere wrote:The firm is growing organically in STL and some jobs will be moving downtown from the Stifel Bank office in Creve Coeur, but acquisitions like KBW, Weisel, Stone & Youngberg, etc. haven't directly brought any new jobs to STL.
In those cases, Stifel is essentially acquiring talent that stays where it's already located - San Francisco, Baltimore, Florham Park, etc. instead of moving to STL. Now, that talent and the additional business it generates for the firm generally does necessitate the hiring of additional support personnel in STL, which is great.
Good information.StL2003 wrote:Stifel currently has somewhere between 50-100 employees working on the top floor of the Deloitte building, who will ultimately be going back to the Broadway/Washington HQ building when interior renovations are complete.
By the way, Stifel reported $1.6-billion in revenues for 2012 so it seems like a possible candidate for the F1000 2013.
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SSM Health Care has bought Audrain Medical Center in Mexico, MO
Source: http://www.bizjournals.com/stlouis/blog ... drain.html
SSM plans to rebrand the hospital, but a new name has not yet been selected. The corporate healthcare business created by the Sisters of Saint Mary (got to love those nuns) already operates another mid-MO hospital, the St. Mary's Health Center in Jefferson City. With this acquisition, SSM plans on creating what it calls a new division specifically focused on hospitals in the middle of the state.
Source: http://www.bizjournals.com/stlouis/blog ... drain.html
SSM plans to rebrand the hospital, but a new name has not yet been selected. The corporate healthcare business created by the Sisters of Saint Mary (got to love those nuns) already operates another mid-MO hospital, the St. Mary's Health Center in Jefferson City. With this acquisition, SSM plans on creating what it calls a new division specifically focused on hospitals in the middle of the state.
This news is especially important to me. That's where I was born. I'll be looking forward to see what this does for my hometown and this hospital, which is Mexico's largest employer.gone corporate wrote:SSM Health Care has bought Audrain Medical Center in Mexico, MO
Source: http://www.bizjournals.com/stlouis/blog ... drain.html
SSM plans to rebrand the hospital, but a new name has not yet been selected. The corporate healthcare business created by the Sisters of Saint Mary (got to love those nuns) already operates another mid-MO hospital, the St. Mary's Health Center in Jefferson City. With this acquisition, SSM plans on creating what it calls a new division specifically focused on hospitals in the middle of the state.