Investopedia: Colfax Makes A Bold Bid

For some companies, M&A is in their DNA. Although most investors have likely never heard of fluid-handling specialist Colfax (NYSE:CFX), the company's major shareholders are the founders of Danaher (NYSE:DHR) and investors familiar with that conglomerate's long acquisitive history will see a similar story here. What is most remarkable about this most recent proposal, though, is its sheer audacity - if Colfax succeeds in acquiring Charter International (Nasdaq:CHITY), it will dramatically increase the company's debt load, revenue base and market exposure.


The Deal That May Be
It should be noted immediately that while Charter's board supports Colfax's bid, it is not a sure thing yet by any means. Nevertheless, Colfax has offered $2.4 billion in cash and stock for Charter International - a remarkably large bid given Colfax's present market capitalization of about $900 million.

Colfax is proposing to acquire Charter for 910 pence (about $14.45) per share, a 7% premium to the standing offer from Melrose to acquire Charter. That 7% premium may not sound remarkable, but Colfax is offering a package that includes about 80% cash, while Melrose's bid was only 35% cash. Based on current expectations, Colfax is offering about 0.75 times estimated 2011 sales, 8 times estimated 2011 EBITDA, and a little less than 14 times estimated 2011 earnings per share. (For related reading, see A Clear Look At EBITDA.)



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Investopedia: TiVo's Battle Only Beginning

It has been a multi-year roller coaster ride for TiVo (Nasdaq:TIVO) bulls, and yet plenty of volatility and uncertainty remains. Not only does the company have several significant IP lawsuits still in progress, but the company is a long way from establishing that it has a business model capable of producing attractive free cash flow in the years to come.

On the other hand, the company has won legal validation for its IP and signed up several major TV partners. With valuable technology and patents, and several large tech companies likely coveting the in-home reach and potential of this technology, TiVo could yet attract some interest from a bidder. As I said, the roller coaster ride isn't over yet.

First Quarter Results Include a Major Win and Significant Concerns  
There is no question that the company's settlement with DISH Network (Nasdaq:DISH) was a dominating factor this quarter. After another legal setback, DISH chose to take a settlement with TiVo - agreeing to pay $500 million in damages, with $300 million upfront and $200 million coming between 2012 and 2017. With that settlement, TiVo was profitable on an accounting basis. 

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Investopedia: Lincoln Electric: A Quality Niche Industrial

With a 42% rise in the stock over the past year and 140% since early 2009 lows, clearly there have been rewards for the nimble and patient with welding equipment maker Lincoln Electric (Nasdaq:LECO). Lucky for Lincoln Electric, though, welding is strongly tied to industrial activity, and the company seems to be looking at a prolonged multi-year recovery in business.   

A Solid End to a Rebound Year
Lincoln Electric surpassed analyst expectations for the fourth quarter, posting 22% revenue growth and surpassing the high-end analyst estimate by 7%. Those results are good enough in their own right; even better when considering the 9% sequential growth and the historical trend for the fourth quarter to be soft. Looking at the company's markets, North American sales jumped 25%, while South America was the laggard at 8% growth. Overall, the company saw volume increase 20% - a strong testament to the increased business activity and product demand.

Profitability was more of a mixed bag for the company. Gross margins shrank by nearly three full points as the company reversed a large LIFO credit to a small charge, but the company did recover a lot of this through an even bigger reduction in SG&A spending. All in all, adjusted operating income rose 26%, while adjusted net income increased 38%. 


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