Marvell Technologies (MRVL) news for Thursday concerning the tech company’s plans to acquire Inphi (IPHI) has MRVL stock taking a fall. Hyliion stock is tough to consider at this point due to its shaky business model and unclear commercial viability
Marvell Technologies (NASDAQ:MRVL) news for Thursday concerning the tech company’s plans to acquire Inphi (NASDAQ:IPHI) has MRVL stock taking a fall.
According to a Marvell Technologies news release, the company is planning to acquire Inphi with a mix of cash and stock. The offer includes $66 in cash and 2.323 shares of MRVL stock for each share of IPHI stock.
The offer from Marvell Technologies values IPHI stock at roughly $157.83 per share based on MRVL stock’s closing price of $39.53 per share on Wednesday. It also represents a roughly 42.2% premium over the closing price for Inphi shares yesterday.
Marvell Technologies says that it will be using cash on hand, as well as additional funding, to complete this deal. It has secured debt financing commitments from JPMorgan Chase Bank, N.A. for the deal.
Matt Murphy, president and CEO of Marvell Technologies, said this about the news.
“Our acquisition of Inphi will fuel Marvell’s leadership in the cloud and extend our 5G position over the next decade. Inphi’s technologies are at the heart of cloud data center networks and they continue to extend their leadership with innovative new products, including 400G data center interconnect optical modules, which leverage their unique silicon photonics and DSP technologies. We believe that Inphi’s growing presence with cloud customers will also lead to additional opportunities for Marvell’s DPU and ASIC products.”
Marvell Technologies and Inphi still need to complete customary closing conditions before the deal is complete. The two companies are expecting the acquisition to close in the second half of 2021.
The Marvell Technologies acquisition news comes on the same day that Inphi released its earnings report for the third quarter of 2020.
MRVL stock was down 5.1% as of Thursday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
William White, InvestorPlace Writer
The Blackstone Group – Wikipedia
Not to be confused with BlackRock Inc, an investment management firm.
- Stephen A. Schwarzman
- (chairman and CEO)
- Jonathan D. Gray
- (president and COO)
- Hamilton E. James
- (executive vice chairman)
- Byron Wien
- (vice chairman of Blackstone Advisory Partners)
Number of employees
The Blackstone Group logo in use prior to the firm’s rebranding as simply Blackstone
Schwarzman’s Blackstone Group completed the first major IPO of a private equity firm in June 2007.
In February 2011, the company acquired Centro Properties Group US from Centro Retail Trust (now Vicinity Centres) for $9.4 billion. The company became Brixmor Property Group and Blackstone sold its remaining interest in the company in August 2016.
In November 2011, a fund managed by the company acquired medical biller Emdeon for $3 billion.
In late 2011, Blackstone Group LP acquired Jack Wolfskin, a German camping equipment company. In 2017, the company was handed over to its lenders.
In August 2012, Blackstone was part of a consortium that financed Knight Capital after a software glitch threatened Knight’s ability to continue operations.
In October 2012, the company acquired G6 Hospitality, operator of Motel 6 & Studio 6 motels from AccorHotels, for $1.9 billion.
In November 2012, the company acquired a controlling interest in Vivint, Vivint Solar, and 2GIG Technologies. In February 2013, 2GIG was flipped to Nortek Security & Control, LLC for $135M.
In April 2013, the company discussed buying Dell, but it did not pursue the acquisition.
In June 2013, Blackstone Real Estate Partners VII acquired an industrial portfolio from First Potomac Realty Trust for $241.5 million. Part of this portfolio was developed by StonebridgeCarras as Oakville Triangle (Now “National Landing”)
In September 2013, Blackstone announced a strategic investment in ThoughtFocus Technologies LLC, an information technology service provider.
In August 2013, Blackstone acquired Strategic Partners, manager of secondaryfunds, from Credit Suisse.
In February 2014, Blackstone purchased a 20% stake in the Italian luxury brand Versace for €150 million.
In April 2014, Blackstone’s charitable arm, the Blackstone Charitable Foundation, donated $4 million to create the Blackstone Entrepreneurs Network in Colorado. The program encourages increased collaboration among local business leaders with the goal of retaining high-growth companies in the state.
In May 2014, Blackstone Group acquired the Cosmopolitan of Las Vegas resort from Deutsche Bank for $1.73 billion.
In August 2014, Blackstone Energy Partners acquired Shell Oil’s 50% stake in a shale-gas field in the Haynesville Shale for $1.2 billion.
In January 2015, Blackstone Real Estate Partners VI announced it would sell a Gold Fields House in Sydney to Dalian Wanda Group for A$415 million.
In June 2015, Blackstone acquired the Willis Tower in Chicago for $1.3 billion.
In July 2015, Blackstone acquired Excel Trust, a real estate investment trust, for around $2 billion.
In November 2015, the company agreed to sell facility management firm GCA Services Group to Goldman Sachs and Thomas H. Lee Partners.
In January 2016, Blackstone Real Estate Partners VIII L.P. acquired BioMed Realty Trust for $8 billion.
In February 2016, Blackstone sold four office buildings to Douglas Emmett for $1.34 billion.
In April 2016, Blackstone acquired 84 percent of Hewlett-Packard Enterprise’s stake in the Indian IT services firm Mphasis.
On January 4, 2017, Blackstone acquired SESAC, a music-rights organization.
On February 10, 2017, Aon PLC agreed to sell its human resources outsourcing platform for $4.3 billion to Blackstone Group L.P., creating a new company called Alight Solutions.
On June 19, 2017, Blackstone acquired a majority interest in The Office Group, valuing the company at $640 million.
In July 2017, the company announced an investment in Leonard Green & Partners.
In January 2018, the company acquired Pure Industrial, a Canadian real estate investment trust for C$2.5 billion.
In January 2018, the company announced acquisition agreement for 55% of Thomson Reuters Financial & Risk unit for $20 billion.
In March 2018, Blackstone Real Estate Income Trust, Inc. acquired a 22 million square foot portfolio of industrial properties from Cabot Properties for $1.8 billion.
In March 2018, Blackstone’s Strategic Capital Holdings Fund invested in Rockpoint Group.
In March 2018, the company’s Strategic Capital Holdings Fund announced an investment in Kohlberg & Company, a private equity firm.
In September 2018, the company acquires control of Luminor Bank in the Baltic countries.
In October 2018, Blackstone launched Refinitiv, the company resulting from its January deal for a 55 per-cent stake in Thomson Reuters Financial and Risk business.
In October 2018, Blackstone announced to buy Clarus. The deal includes assets worth $2.6 billion.
In March 2019, Blackstone purchased a minority stake in YES Network.
In April 2019, Blackstone acquired a majority stake in the tube packaging company, Essel Propack for $310 million.
In June 2019, Blackstone announced it had teamed with the Canada Pension Plan Investment Board and KIRKBI to buy Merlin Entertainment, the owners of Legoland in a deal worth £5.9 billion (about $7.5 billion). This would be the 2nd time Blackstone would own the company as they previously purchased it in 2005.
On July 15, 2019, Blackstone announced its plans to acquire Vungle, a leading mobile performance marketing platform.
In September 2019, Blackstone announced it agreed to purchase 65% controlling interest in Great Wolf Resorts from Centerbridge Partners. They plan to form a joint venture worth $2.9 billion or more to own the company.
On November 8, 2019, Blackstone Group acquired a majority stake MagicLab, the owner of dating app Bumble.
Blackstone Group on November 15, 2019, invested $167 million in the holding company of Future Lifestyle Fashions Ltd., Ryka Commercial Ventures Pvt. Ltd.
On November 18, 2019, Blackstone Real Estate Income Trust, Inc. acquired the Bellagio resort in Las Vegas, Nevada from MGM Resorts in a sale-leaseback transaction.
On November 25, 2019, Reuters reported that Blackstone planned to invest $400 million in a joint venture with Swiss drug company Ferring. The joint venture will work on gene therapy for bladder cancer. The investment represents Blackstone Group’s largest investment in drug development to date.
In March 2020, Blackstone announced that it is buying a majority stake in HealthEdge, a health-care software company. The deal worth $700 million was completed on April 13, 2020.
In July 2020, Blackstone invested US$200m in the Swedish oat milk brand, Oatly, for a 7% stake in the company, triggering outrage among some segments of its customer base.
In August 2020, Blackstone announced that it will buy a majority stake in Ancestry.com for $4.7 billion (including debt).
In August 2020, Blackstone acquired Takeda Consumer Healthcare for $2.3 billion.
Employees: 250 (approximate)
Employees: 500 (approximate)
Gulfstream G650ER jet owned by The Blackstone Group.
Stephen A. Schwarzman: chairman, CEO & co-founder
Jonathan D. Gray: president & COO
Hamilton E. James: executive vice chairman
J. Tomilson Hill: vice chairman & chairman of the Hedge Fund Solutions group, Blackstone Alternative Asset Management (BAAM)
Joseph Baratta: Global Head of private equity
David S. Blitzer: Global Head of tactical opportunities
Verdun Perry: Global Head of Strategic Partners
Jonathan Korngold: Global Head of growth equity
Dwight Scott: Global Head and President of GSO Capital Partners
Kenneth Caplan: global co-head of real estate
Michael S. Chae: CFO
John Stecher: CTO
Bennett J. Goodman: co-founder of GSO Capital Partners
John G. Finley: CLO
Kathleen McCarthy: global co-head of real estate
Joan Solotar: head of private wealth solutions & external relations
Stephen A. Schwarzman: chairman of the board of directors and the executive committee
Hamilton E. James: member of the executive committee
Jonathan D. Gray: member of the executive committee
J. Tomilson Hill: member of the executive committee
Bennett J. Goodman: member of the executive committee
James W. Breyer: independent director & member of the audit committee and the conflicts committee
Rochelle B. Lazarus: independent director & member of the audit committee and the conflicts committee
Jay O. Light: independent director & member of the audit committee and the conflicts committee
The Right Honorable Brian Mulroney: independent director
William G. Parrett: independent director & chairman of the audit committee and the conflicts committee
Ruth Porat: independent director
List of outdoor industry parent companies
List of venture capital firms
September 13, 2018, Blackstone to Acquire €1 billion Majority Stake in Luminor Through a Corporate Partnership
Hyliion Isn’t Your Best Bet at the Electric Truck Industry
Hyliion Holdings (NASDAQ: HYLN) is a promising new entry in the up-and-coming zero-emissions transport sector. It recently went public through a merger with a shell company, Tortoise Acquisition, in a deal worth over $500 million. Hyliion aims to develop environmentally-clean semi-trucks, which could have significant upside potential in the future. However, its overdependence on its suppliers, unclear commercial viability, and questionable growth rates make Hyliion stock a risky bet at this stage.
The company has one of the more interesting business models in the electric vehicle industry. It essentially develops electrified drive train systems that can be fitted in Class 8 trucks and powertrains. Hence, haulage companies will benefit from the hybrid solution without having to replace their fleet. Its pièce de résistance is its ERX powertrain system, which the management claims could have 2.6 times the range of a Tesla (NASDAQ: TSLA).
Hyliion has potential, but the risks are too grave to ignore. Let’s dive a little deeper into these.
The alternative fuels market is growing, and EV companies are riding the tailwinds in the sector. Additionally, Covid 19 has significantly impacted consumer preferences toward online retail and home delivery. Hence, companies such as Hyliion will benefit from these tailwinds in the logistics business providing a major growth catalyst for the future.
However, the battle for the ideal technology for eco-friendly powertrains is still inconclusive. Each technology has its pros and cons, and stakeholders are still trying to get a grip on which works best. Hyliion’s product is unique, but it’s tough to estimate its sales potential at this point. Its recent 1,000-unit pre-order doesn’t quite help either. The order is placed by Agility Logistics, which has an equity interest in the company. Therefore, it’s tough to consider the order anything more than an inter-company transfer. It provides no information about the commercial viability of Hyliion’s product. Additionally, Agility is more involved in the airfreight business than trucking.
One of Hyliion’s business model’s main problems is that it is outsourcing significant parts of its business to a variety of firms. Some of these even hold stakes in the company. For example, Dana Incorporated, an EV component supplier, holds an equity interest in Hyliion and also provides it with components and its expertise. Additionally, it outsources batteries from Toshiba (OTCMKTS: TOSYY), its designs from IAV Automotive Engineering, and its modification centers from Fontaine Modification. Therefore, the company’s supply chain is overly reliant on its partnerships and agreements with third parties. The situation raises questions about the long-term technological viability of the company.
Another concern for Hyliion’s investors relates to its prospects. The management believes that it has immense potential with its total addressable market to be worth billions. However, it expects to rake in only $9 million from sales of 320 units till 2021. If everything goes smoothly, the company would be able to sell its ERX unit by 2022. It expects to sell 2500 ERX units and 4,100 hybrids, generating over $300 million in revenues. That figure could exceed $2 billion by 2024. However, there isn’t a lot of clarity on whether the company would back up its claims. Projections so far are lofty, hence most investors would want to employ the wait and see approach.
Hyliion’s business model is attractive and one which may have a significant upside in the future. Its plug and play hybrid system is a novelty in the electric vehicle industry, and the company can capitalize on its technology before its competitors make inroads. However, the company’s business model’s problem is that it continues to outsource substantial portions of its business. Such measures will have a detrimental impact on the company’s moat. Additionally, the company’s ability to successfully launch its ERX units is also a question mark so far. Therefore, investing in Hyliion stock is a risky bet at this point.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article