Everywhere you turn these days, people seem to be talking about the “long tail” — in entertainment, in search, in insurance (where it’s been used for years). Colloquially, it tends to mean that there’s a pattern or tendency for a small but significant number of events or data-points to occur long after (or well away from) the main cluster that people pay attention to.
Our own M&A research turns out to have something of a long tail as well, as shown by yesterday’s announcement that Kinder Morgan Energy Partners (KMP) is acquiring Copano Energy (CPNO) for about $5 billion in equity. Here’s Copano’s press release, and here’s Kinder Morgan’s much less readable one.
Copano, of course, was one of the 10 companies that we flagged at the beginning of 2011 as likely acquisition targets, in a report sent to footnotedPro subscribers. The deal price is about 18% over the closing price on our publication date.
Copano’s announcement means four of those 10 companies have now been acquired or announced deals (along with several other M&A prospects we’ve identified outside the annual M&A reports). The other three from the 2011 M&A report all announced deals within a few months of publication: Smurfit-Stone Container, Pride International, and Lawson Software.
While we tend to define our “sweet spot” for identifying risks and opportunities in the filings as somewhere in the neighborhood of three to six months, Copano isn’t the first company to fall outside that range. In March 2009, we wrote that Jo-Ann Stores looked like a good takeover target, and in December 2010 it said it would go private – at a 300% premium over the date of our report, significantly better than the 18% to 24% range for the 2011 picks.
We don’t want to get too cocky: We’ve had some promising picks flame out, like WebMD (WBMD) — the company was in fact in talks with suitors around the time we flagged it, but didn’t ultimately go through with a deal. Moreover, none of the 10 companies we for our 2012 M&A report, published about a year ago, have announced deals.
Yet. We’ll keep you posted.
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