Filed under: Company News, Barnes & Noble, Mergers & Acquisitions, Rumors, Investing
It may be the market’s historical summertime lull, but mergers and acquisitions are on the rise.
A pair of mergers kicked off this week with real estate portal Trulia (TRLA) and deep discounter Family Dollar (FDO) getting bought out at reasonable premiums. Let’s go over a few companies that may be acquired soon.
Barnes & Noble (BKS)
Selling real books isn’t easy these days, but Barnes & Noble is holding up as the last major superstore. In a move that’s long overdue, the retailer announced last month that it will spin off its troublesome Nook business early next year.
Between its prolific superstores, steady campus bookstores and growing online storefront, there are plenty of moving parts at Barnes & Noble to attract a private equity firm. The buyer could carve out what’s worth keeping and attempt a turnaround away form a finicky market that needs improvement on a quarterly basis.
SodaStream (SODA)
There have been struggles at SodaStream, and global demand for carbonated beverages has been stagnant. It’s against this difficult climate that reports surfaced late last week about SodaStream in talks with an undisclosed private equity firm for a buyout.
Sources told Bloomberg that SodaStream may be acquired at roughly $40 a share. A year ago SodaStream would have laughed at this kind of chatter, but after several rough quarters where growth is slowing and margins are getting crushed, it’s easy to see why SodaStream may be willing to listen.
Pandora Media (P)
Digital music is growing in popularity, and Pandora has been the poster child for streaming sites. Music fans took in more than 5 billion hours of Pandora content in its latest quarter, but growth has been slowing.
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More importantly, tech giants are snapping up digital music specialists. Re/code reported on Monday that Apple (AAPL) is in talks to acquire app maker Swell. This follows Google (GOOG) buying Songza, and Apple’s purchase earlier this year of Beats Music.
It’s odd to see Apple and Google buying smaller music apps when the niche’s whale — Pandora — is still available. As consolidation continues and Pandora faces a more challenging climate, punching out may seem like a smart solution.
Nintendo (NTDOY)
Video game sales were in a slump for a few years until the Xbox One and PlayStation 4 hit the market in November. Unfortunately the same kind of excitement for the two consoles didn’t materialize a year earlier when Nintendo put out the Wii U.
Nintendo’s hardware struggles may make it an unappetizing buyout candidate, but then we get to Nintendo’s software business. This is, after all, the company behind Super Mario, Pokemon, Zelda and countless more iconic gaming franchises. Armed with Nintendo’s characters, a company could quietly bow out of the hardware end and push its games across various devices and platforms.
LeapFrog Enterprises (LF)
LeapFrog’s electronic learning toys that were all the rage through the 1990s have fallen out of favor. It has a short-lived renaissance two years with its LeapPad tablet, but a deluge of cheaper full-featured tablets that do more than just play kid games ate into its potential.
LeapFrog has been introducing products and improving existing products. Given LeapFrog’s strong brand in electronic learning, it would make sense for a tech company looking to hook younger users — or for a larger toymaker looking for growth — to snap up LeapFrog at a discount to its all-time highs. After all, LeapFrog just graduated from the school of hard knocks.
Motley Fool contributor Rick Munarriz owns shares of SodaStream. The Motley Fool recommends Apple, Google (C shares), LeapFrog Enterprises, Pandora Media and SodaStream. The Motley Fool owns shares of Apple, Barnes & Noble, Google (C shares), LeapFrog Enterprises, Pandora Media and SodaStream.
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Source: Investing
