The Spirit-JetBlue saga; Reddit pushes ahead with IPO plans; Netsmart explores sale; and much more
Happy Friday!?
Earlier today, yours truly and Rajesh Kumar Singh were first to report that Spirit Airlines was pressing JetBlue to appeal a decision by a federal judge to block the tie-up between the sixth and seventh largest U.S. airlines . Our story was confirmed sometime ago after the two airlines agreed to appeal the judge's ruling.
U.S. District Judge William Young in Boston had earlier this week ruled that JetBlue's planned $3.8 billion acquisition of ultra-low-cost carrier Spirit was anticompetitive and would harm consumers, thus handing a victory to the Justice Department and six states.
The airlines filed a notice late on Friday that they will appeal his ruling to the 1st U.S. Circuit Court of Appeals. The companies said in a statement the appeal notice filing was "consistent with the requirements of the merger agreement."
The appeal continues the court fight to keep the merger alive, a deal Spirit needs as it faces financial difficulties, including the grounding of numerous jets due to a powdered-metal issue in its geared turbofan (GTF) engine. Spirit shares jumped 12% after the notice of appeal in after-hours trading on Friday but are still down more than 50% since Tuesday's ruling. JetBlue shares were down 1.8% late on Friday.
As we reported earlier, Spirit had told JetBlue that their deal contract requires them to exhaust legal options to complete the move, and that they should appeal the judge's ruling.
A person familiar with the matter told Reuters on Thursday that Spirit had began examining ways to refinance its debt should its deal with JetBlue fall through.
Elsewhere, Echo Wang and I scooped that social media platform Reddit has drawn up detailed plans to launch its IPO in March, moving forward with a listing it has been eyeing for more than three years .
It would be the first IPO of a major social media company since Pinterest's debut in 2019, and would come as Reddit and its peers face stiff competition for advertising dollars from the likes of TikTok and Facebook.
The offering would also test the willingness of some Reddit users to back the company's stock market debut. Many investors posting on the platform have helped fuel dozens of "meme" stock rallies in the last three years, from retailer GameStop to movie operator AMC Entertainment.
Reddit, which filed confidentially for its IPO in December 2021, is planning to make its public filing in late February, launch its roadshow in early March, and complete the IPO by the end of March, two of the sources said.
The San Francisco-based company, which was valued at about $10 billion in a funding round in 2021, is seeking to sell about 10% of its shares in the IPO, the sources added. It will decide on what IPO valuation it will pursue closer to the time of the listing, according to the sources.
Founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, Reddit became best known for its niche discussion groups and its users voting "up" or "down" on the content posted by other members.
The company, which generates its revenue primarily through advertising and also offers premium access for $5.99 per month, has yet to turn a profit, Huffman said in a Reddit post last June.
In the past, the company has attributed its losses to investing in the platform and its users engaging less with advertising on its site than other social media.
The company held back from pulling the IPO trigger until it came closer to profitability. Bouts of market volatility that shut down the IPO market for much of the last two years also contributed to it delaying its plans.
And finally, Milana Vinn, David Carnevali and I reported that the private equity owners of Netsmart Technologies are exploring a sale of the U.S. healthcare software firm that they hope will value it at more than $5 billion, including debt.
The Overland Park, Kansas-based company, which is owned by GI Partners and TA Associates, is working with investment banks Goldman Sachs and William Blair to launch a sale process in the coming weeks.
Netsmart expects to generate earnings before interest, taxes, depreciation and amortization of about $250 million this year. Potential buyers could include other private equity firms.
Founded in 1968, Netsmart is a provider of electronic health records services, healthcare information exchanges, and software that is used for telehealth services.
The company's offerings are used primarily by community-based healthcare centers, non-profit healthcare organizations and hospice care centers across the United States. Netsmart currently has a user base of more than 754,000 at care centers it counts as clients.
Netsmart serves communities that specialize in areas such as behavioral health, addiction treatment, intellectual and developmental disabilities, child and family services, and home health and hospice.
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And here’s a quick recap of the?highlights from the Reuters corporate finance file from the last couple of weeks:?
Synopsys unveiled its deal to buy Ansys for $35 billion in cash and stock, confirming our Dec 22 scoop .
Swedish private equity giant EQT is targeting more acquisitions to accelerate growth and better compete in tough markets, its Chief Financial Officer Kim Henriksson told Reuters.
Global Infrastructure Partners (GIP) is in talks to buy up to a 49% stake in MMC Port Holdings, in a deal potentially valuing Malaysia's biggest port operator at around 30 billion ringgit ($6.4 billion), two sources with knowledge of the matter said.
Canadian miner First Quantum Minerals is exploring a rights issue as it seeks to strengthen its balance sheet, following the closure of a key mine in Panama last month that accounted for about 40% of its revenue, two sources familiar with the matter told Reuters.
Worldline has lined up bankers to advise on a defence strategy in a bid to reassure shareholders and avoid a hostile takeover in the wake of a share price slump, two people with knowledge of the matter told Reuters.
LiveRamp Holdings, a software company which helps match up customer datasets for brands, advertisers and retailers, told Reuters it has agreed to acquire marketing data startup Habu for $200 million in cash and stock.
Sixth Street has appointed Marcos Alvarado as its head of U.S. real estate, according to a statement, as it seeks further investments in a sector starved of capital in the wake of high interest rates and an office property downturn.
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Thank you for reading this week’s edition. Please do share the newsletter with anyone you think might find it useful.
Have a wonderful weekend!
Best,
Anirban?
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Anirban Sen
Editor in Charge, U.S. Mergers & Acquisitions
Reuters News
Thomson Reuters