A survey of North American equities heading in both directions
On the rise
Shares of Copperleaf Technologies Inc. (CPLF-T) jumped on Tuesday after announcing it has agreed to a $1-billion takeover by IFS AB, making it the ninth out of 20 tech companies that went public during an unprecedented rush of new issues on the Toronto Stock Exchange in 2020-21 to reverse course.
The Vancouver company, which sells optimization artificial intelligence-powered software to large enterprises such as utilities and transportation infrastructure giants to analyze, plan and budget how to spend their capital budgets, said Tuesday it had agreed to a bid of $12 a share from the Swedish company. The deal follows an auction that started earlier this year after IFS approached Copperleaf about a potential takeover for at least the second time, according to a source familiar with the deal. The Globe and Mail is not identifying the source because they are not authorized to discuss the matter.
The offer is a premium of 70 per cent to Copperleaf’s closing price on May 3, the last trading day before IFS, a global leader in enterprise software for field service management, made its offer, but just 18 per cent above Monday’s closing price. Copperleaf stock has been one of the top tech gainers on the TSX since it announced better-than-expected first quarter results six days after it received IFS’s bid.
“This transaction is a great milestone in Copperleaf’s journey,” said Copperleaf chairman Amos Michelson, a Vancouver tech industry veteran who owns 8.4-million shares, or 11.3 per cent of the stock, in a statement. “It’s evidence of IFS’s belief in our organization and recognition of our success, and rewards our shareholders with attractive cash consideration, providing immediate value and liquidity for their shares.”
IFS chair Darren Roos said in a statement: “The combination of Copperleaf and IFS creates compelling value for the complex, asset-intensive customers we serve as well as partners, investors and employees”.
- Sean Silcoff
Bird Construction Inc. (BDT-T) gained 6.7 per cent after announcing a $135-million deal for Surrey, B.C.-based civil infrastructure contractor Jacob Bros Construction after the bell on Monday
Reaction from the Street: Tuesday's analyst upgrades and dowgrades
It said the acquisition establishes it in “B.C.’s high-demand civil infrastructure market and adds significant scale and diversification in the region.” The company expects value creation through anticipated 10-per-cent adjusted earnings per share accretion “with further potential upside from cross-selling opportunities and other synergies.”
General Motors (GM-N) was higher by 1.4 per cent as it announced a new US$6-billion share buyback plan, just over a month after the automaker raised its dividend on upbeat annual forecast, citing stable prices and demand for gasoline-engine vehicles.
The company had in November outlined a US$10-billion stock buyback on the heels of reaching a costly new labor agreement with the United Auto Workers union.
GM completed the first tranche in the first quarter and is on track to reduce its outstanding share count to under 1 billion. Its market capitalization was US$54-billion as of latest close, as per LSEG data.
GM had in January raised its dividend by 33 per cent to 12 US cents per share.
Shares of Apple Inc. (AAPL-Q) climbed 7.3 per cent to a record high on Tuesday, a day after unveiling new artificial intelligence features meant to increase the appeal of its devices, including the iPhone.
The rally comes as a breather for the stock, that has underperformed versus the benchmark S&P 500 this year, as Apple grapples with weak sales for its premium consumer gadgets.
Apple stands to add US$180-billion to its market value if the current stock price of US$205 holds.
At US$3.15-trillion, its market capitalization is just US$40-billion shy of Microsoft’s (MSFT-Q), the world’s most valuable company. Nvidia (NVDA-Q), the largest benefactor of a boom in AI applications and number three in terms of market value, is at $2.93 trillion.
At its annual developer event that kicked off on Monday, Apple unveiled an improved Siri virtual assistant that can answer a wider range of queries and accomplish more complicated tasks than earlier, and several AI features across its apps that will be shipped with the latest operating systems for iPhones, iPads and Mac computers.
At least 13 analysts raised their price targets on Apple’s shares after the developer event, and said the latest features could encourage a cascade of new purchases as the company prepares to announce a new line of iPhones in autumn.
“Apple is demonstrating that it is invested in evolving its platform and devices to enable the next era of computing, interfaces and experiences,” Gartner analyst Tuong Nguyen said.
Apple’s shares closed 1.9 per cent lower on Monday but were up 6 per cent year-to-date, while the S&P 500 rose 12 per cent in the same period
On the decline
Gibson Energy Inc. (GEI-T), which is proposing to use carbon capture and storage technology to create clean electricity from landfill waste, was narrowly lower despite becoming the second to secure a carbon price backstop contract through the Canada Growth Fund.
The Calgary-based company, which operates crude oil pipelines and crude oil storage terminals in North America, is developing what would be Canada’s first waste-to-energy facility with carbon capture technology.
The Alberta facility would divert solid waste otherwise headed to the City of Edmonton’s landfill and incinerate it to create electricity. Carbon capture technology at the site would trap the greenhouse gas emissions produced as part of the process, ensuring none enter the atmosphere.
Gibson said Tuesday it has reached a deal with the $15-billion federal Canada Growth Fund that will help it accelerate the development of the project.
Under the terms of the deal, Gibson would own 50 per cent of the project, while the Canada Growth Fund would have a 40 per cent stake. Varme Energy, the Canadian subsidiary of Norwegian-based Varme Energy AS, will be involved in the development and construction of the project and will own the remaining 10 per cent stake.
Included in the deal is a carbon price assurance mechanism through which the Canada Growth Fund commits to purchasing 200,000 tonnes per year of carbon credits generated by the project at an initial price of $85 per tonne for a 15-year term.
This type of carbon offtake agreement, sometimes referred to as a carbon contract for difference, essentially guarantees that if the price of carbon falls below a certain level in the future, the Canada Growth Fund will pay the difference.
Descartes Systems Group (DSG-T) finished flat on news it has acquired BoxTop Technologies Ltd., a maker of software for small- to mid-sized logistics services companies, for US$13-million.
Companies use BoxTop’s platform to manage the movement of goods from quoting through to routing, booking and final delivery.
BoxTop is based in Windsor, England.
The company was a partner with Descartes before the acquisition.
Scott Sangster, general manager of logistics services providers at Descartes, called the deal the “next logical step.”
Descartes specializes in software for supply chain and logistics management applications.
Eli Lilly (LLY-N) was narrowly lower after outside advisers to the U.S. Food and Drug Administration on Monday voted unanimously that the benefits of its experimental Alzheimer’s treatment donanemab outweighed its risks, and agreed that trial data showed it was effective in patients with an early stage of the memory-robbing disease.
The vote clears the way for a final FDA decision on the treatment, which initially had been expected earlier this year before the agency called for the meeting so its independent panel of experts could weigh in.
“We really are pleased that the advisory committee recognized donanemab’s strong positive benefit risk,” Dawn Brooks, Lilly’s development leader for donanemab, said in an interview after the vote.
Now with the panel’s unanimous support, the company looks forward to the FDA finishing its review, she said.
The agency is not obligated to follow the recommendations of its outside advisers, but typically does so.
In its discussion, the FDA had asked the panel to consider some unique aspects of Lilly’s trial, which differed significantly from the trial design of Eisai and Biogen Leqembi, which won U.S. approval after going through a similar advisory committee meeting.
Both drugs are designed to remove toxic beta amyloid plaques from the brains of people with early Alzheimer’s disease.
Massachusetts-based Sage Therapeutics (SAGE-Q) was down in volatile trading in the wake of saying on Tuesday its experimental drug was found to be safe and showed some effect in patients with a rare, genetic neurological condition called Huntington’s disease in a part of a mid-stage study.
The company, however, said the study in Huntington’s disease patients was not designed to show a statistically significant difference between the drug dalzanemdor and placebo.
The news follows a mid-stage trial failure for the same drug, in April when it was tested in patients with Parkinson’s disease.
With files from staff and wires
David Leeder