To Our Investment Partners:
Portfolio holding Abiomed (ABMD) announced it agreed to be acquired by Johnson & Johnson (JNJ) for an upfront payment of $380 per share, up 48% from yesterday’s close of $252 per share. Per the terms, Abiomed shareholders will initially receive $380.00 per share in cash, in addition to one non-tradeable contingent value right (CVR), under which they can receive up to $35.00 per share in cash if certain milestones are reached.
Abiomed was always one of our smaller holdings simply because we could not acquire shares at a reasonable discount to our estimated intrinsic value. While kicking myself for not investing more capital when we had the chance, that’s the downside of having an insistence on a margin of safety. This is one of those cases (like previous portfolio acquisitions) where we are happy to see others appreciate our investment thesis but also sad to see an outstanding company leave the portfolio. This deprives us of watching the magic of compounding over the next decade or two. That said, in this case, we will (happily) take our profits and move on to new investment pastures.
Abiomed is the fourth company in the Nintai Portfolios to be acquired, with the previous being Solarwinds, ARM Holdings, and Linear Technologies.
Please let me know if you have any questions or comments. My best wishes.
Tom
Portfolio holding Abiomed (ABMD) announced it agreed to be acquired by Johnson & Johnson (JNJ) for an upfront payment of $380 per share, up 48% from yesterday’s close of $252 per share. Per the terms, Abiomed shareholders will initially receive $380.00 per share in cash, in addition to one non-tradeable contingent value right (CVR), under which they can receive up to $35.00 per share in cash if certain milestones are reached.
Abiomed was always one of our smaller holdings simply because we could not acquire shares at a reasonable discount to our estimated intrinsic value. While kicking myself for not investing more capital when we had the chance, that’s the downside of having an insistence on a margin of safety. This is one of those cases (like previous portfolio acquisitions) where we are happy to see others appreciate our investment thesis but also sad to see an outstanding company leave the portfolio. This deprives us of watching the magic of compounding over the next decade or two. That said, in this case, we will (happily) take our profits and move on to new investment pastures.
Abiomed is the fourth company in the Nintai Portfolios to be acquired, with the previous being Solarwinds, ARM Holdings, and Linear Technologies.
Please let me know if you have any questions or comments. My best wishes.
Tom
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