Hit #153 (Dollar General)

Dollar General (DG) is being taken private by KKR in a mega deal valuing the company at $7 billion. The offer, cash of course, translates to $22/share, a gain of 14.5% over my average cost of $19.21/share.

Dollar stores have been expanding at a steady pace. I mentioned a few of them in this post after an earlier Arizona trip. The other dollar stores listed in that post, Dollar Tree (DLTR), 99 Cents Only (NDN), Family Dollar (FDO) may all end up with other/larger retailers, but for now they all look expensive following the Dollar General deal.

This buyout follows a similar, but much smaller deal for Smart & Final (Hit #145). And there is more to come!

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Previous hit - SafeNet(#152)

Hit #152 (SafeNet)

SafeNet (SFNT) is being acquired by Vector Capital in a $634 million buyout. The cash offer of $28.75 gives me a 37.9% gain over my average cost of $20.85.

I had bought SafeNet after it had pulled back following options related investigations. I had mentioned in this post that it had become attractively valued.

Given the depressed price to start with, the company is going for a bargain. Shareholders deserve better, and the former executives deserve long prison sentences - if only it worked that way!

I would also have expected some strategic buyer to show interest. In my posts (here and here) I had speculated on possible larger corporate buyers. There may yet be a counter-offer. And hopefully this one won't insult shareholders.

Other targets mentioned in my earlier posts, Websense (WBSN), Secure Computing (SCUR), Aladdin (ALDN) and Blue Coat Security (BCSI) have all moved up considerably over the last few months. Aladdin and to a lesser extent, Websense, are still worth buying at current price levels.

But beaten down Symantec may be the best security buy now for long-term investors.

A recent IPO in the security-related sector is Guidance (GUID). Guidance will likely be acquired down the road, but during the current growth phase it could generate tremendous returns to investors before that happens.

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Previous hit - Dendrite(#151)

Hit #151 (Dendrite)

Dendrite (DRTE), a sales/marketing services provider to the pharmaceutical industry, is being acquired by French company Cegedim SA. The $751 million cash offer translates into a per-share price of $16, a discount of 9.8% to my average cost of $16.42.

I was hoping this to be a long-term winner but the stock hasn't budged since I bought it a couple of years ago.

Another company to watch here would be PDI (PDII), which still looks attractively valued.

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Previous hit - Hyperion (#150)

Hit #150 (Hyperion)

Hyperion (HYSL), after years of being rumored to be a target for one buyer or the other, is being bought, by Oracle. The cash offer of $3.3 billion translates into $52/share, a gain of 138.5% over my split-adjusted average cost of $21.8.

I had mentioned Business Objects (BOBJ) as the next top target for Oracle. I was wrong on that count.

This is a good buy for Oracle, and will hurt SAP given the latter's close partnership with Hyperion. SAP itself may go after Business Objects (BOBJ), while IBM probably will like Cognos (COGN).

Oracle's buying spree, noted in some of my posts, is hopefully coming to an end. Oracle needs some time to digest the pieces. The spree has already led to Oracle's shares being consistently ignored and undervalued as some of the cost-cutting/productivity promised has not materialized. Investors with a longer-term outlook should be buyers at this point, since I believe ultimately Oracle would have come out far ahead, thanks to these acquisitions.

On the lower end, Oracle will likely have to give away its database for free, but the resulting revenue loss should be made up by selling newer higher-level bundles.

So, who will it be next for Oracle ? I had made a list of possible candidates in two posts - here and here. I would assume that BEA (BEAS), Lawson (LWSN) and Informatica (INFA) are the ones on the top of the list.

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Previous hit - Cronos(#149)

Hit #149 (Cronos)

Cronos (CRNS) is being taken private in a management-led buyout. The $133 million cash offer translates into a per-share price of $16, representing a gain of 34.2% over my average cost of $11.92.

The only other public company in this sector, InterPool (IPX), got its own offer earlier this year. The company is yet to decide on the offer, and is probably just waiting for the bid to be raised before accepting.

While not a direct sector play, Pacer (PACR), a spin-off of APL, makes for a long-term dividend-yielding bet on intermodal service.

Since we are on containers, for the interested I would recommend this recent book The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. I have read a few pages, but will be waiting for the softcover edition to read further!

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Previous hit - Smith & Wollensky(#148)