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Market Update

CVS Acquires Pharmacy Business of Target, Homebuilders Agrees to Merge

Author: Mukesh Buch
Last Update: 12:48 PM ET June 15 2015

12:40 PM New York CVS Health agreed to acquire the in-store pharmacy from Target for $1.9 billion. Comverse net loss widened and agreed to buy U.K.-based Acision. Masonite received binding offer from France-based Perceva. United Technologies plans to sell or split its Sikorsky helicopters business.

Tollbooth Index decreased 0.5% or 57.93 to 10,685.45.

Earnings Review

CVS Health Corp gained 81 cents to $103.04 after the drugstore chain agreed to acquire the in-store pharmacies and clinics business of discount-store operator Target, Inc for about $1.9 billion to expanding its presence in new markets like Seattle, Denver, Portland and Salt Lake City.

Comverse Inc (CNSI) increased 1% or 24 cents to $24.27 after the telecom business solution provider said revenues in the first-quarter ending in April declined 29.8% to $45.7 million from a year ago period.

Net loss in the quarter widened to $26.66 million or $1.22 per diluted share compared to $16.1 million or 72 cents from the same quarter last year.

Separately, the company agreement to acquire a privately-held U.K.-based Acision secure mobile messaging and engagement services provider for $135 million in cash, 3.13 million shares of Comverse''s common stock, and potential earn-out payments of up to $35 million.

The transaction is expected to close in third-quarter of this year.

Motorcar Parts of America, Inc (MPAA) fell 7 cents to $29.75 after the aftermarket auto parts maker said net sales in the fourth-quarter ending in March climbed 9.4% to $83.9 million in a year ago period.

Net income in the quarter was flat at $3.1 million from a year ago period and diluted earnings per share slipped to 16 cents compared to 19 cents from the same quarter last year.

Masonite International Corp (DOOR) increased 52 cents to $68 after the interior and exterior doors designer received a binding offer from France-based Perceva, the independent investment firm to acquire Premdor SAS, Masonite''s domestic door business.

Standard Pacific Corporation (SPF) soared 6.9% or 58 cents to $8.94 after the home builder and Ryland Group Inc. agreed to combine in a merger to form a company with a market capitalization of about $5.2 billion and enterprise value of about $8.2 billion.

The combined company will control about 74,000 home-sites and joint revenues of $5.1 billion.

The transaction is expected to close in early fall of this year.

Shares of Ryland Group Inc climbed 5.8% to $45.32.

United Technologies Corporation (UTX) dropped 2.1% or $2.46 to $115.17 after the aerospace products maker plans to either sell or spin off its $8 billion Sikorsky Aircraft unit, the maker of the Black Hawk helicopters for the U.S. military.

The final decision is expected by the end of the third-quarter.

The company forecasted revenues for the year between $58 billion and $59 billion and earnings per share in the range of $6.35 to $6.55.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc