WWII 034: Merger Arbitrage Example $CVT Purchase By Vista Capital for 39% AROI, How to Invest $500, Unemployment Rate and Productivity Gains
In this episode, I shine the light on a merger arbitrage that closed in November 2016 that resulted in a 39% annualized return.
Main Topic: $CVT Take-Private Transaction by Vista Capital - 39% Annualized Return
The CVT transaction was a take-private transaction by Vista Capital. Vista paid $1.65B for CVT.
Cvent is a software company based in McLean, Virginia and is the market leader in web-based event management, venue sourcing, and strategic meetings management software. We have 1,900+ employees and 166,000 users in over 100 different countries.
Cvent was established in 1999 with the development of the Event Management tool. Since then the company has launched several other web-based software applications, including the Cvent Supplier Network.
The Cvent Supplier Network connects meeting planners with over 239,000 event venues and service providers globally. It is a free tool, allowing event and meeting planners to search detailed profiles of venues and service providers, send requests for proposals (RFPs), and then compare bids, details and availability with side-by-side reports. Cvent makes it easy to manage the event planning process and select the best suppliers for your event.
Deal announced: 4/17/2016
Deal Closed: 11/29/2016
Deal Price: 100% Cash $36.00
Weighted Average Cost was $32.45
Weighted Average Return was 10.8%
Weighted Average Annual Return was $39.3%
Here are some of the critical articles:
This is a link to the press release announcing that Vista Capital is buying CVent
Here is the final press release announcing that the transaction closed on 11/29/2016
At one point, the Department of Justice requested additional information
Here’s a blogger talking about the ins and outs of this transaction.
"Berkshire Hathaway's arbitrage activities differ from those of many arbitrageurs. First, we participate in only a few, and usually very large, transactions each year. Most practitioners buy into a great many deals perhaps 50 or more per year. With that many irons in the fire, they must spend most of their time monitoring both the progress of deals and the market movements of the related stocks. This is not how Charlie nor I wish to spend our lives. (What’s the sense in getting rich just to stare at a ticker tape all day?)"
Ask JB: Getting Back Into The Market
submitted 5 days ago by urban_
submitted by blthecamera
- Make sure you meet the minimum suggested financial status before investing. Listen to episode 6 first
- If you insist on investing this amount, choose two value stocks and split the funds up. You will pay 3-4% in commissions.
- Keep adding to the account each month and over time the commissions won't eat in to the returns as much.
- Use the time to learn as much as you can about value investing.
- It's better to make mistakes (you will) with small amounts now, rather than large amounts later.