More positive vaccine news lit a fire under the stock market on Monday, with the Dow Jones Industrial Average (DJINDICES:^DJI) up about 1.4% at noon EST. Moderna announced that an independent data-safety monitoring board found that its coronavirus vaccine candidate had an efficacy rate of 94.5% in a large phase 3 trial. The company expects to have 20 million doses ready to ship in the U.S. by the end of 2020, and it's on track to manufacture as many as 1 billion doses globally next year.
Turning to individual stocks, there was a flurry of acquisitions coming from Dow components on Monday. Home Depot (NYSE:HD) announced an agreement to acquire HD Supply (NASDAQ:HDS); International Business Machines (NYSE:IBM) inked a deal to acquire TruQua; and Cisco Systems (NASDAQ:CSCO) is bringing Banzai Cloud under its wing.
Home Depot acquires HD Supply
Home improvement retailer Home Depot sold off its commercial supply business to private equity firms back in 2007 for $8.5 billion. That business then went public as HD Supply in 2013.
On Monday, Home Depot announced that it was bringing HD Supply back under its own umbrella. The company has agreed to acquire HD Supply for $56 per share, with the deal carrying a total enterprise value of about $8 billion. Home Depot will use new debt to pay for part of the transaction.
HD Supply is a leading distributor of maintenance, repair, and operations (MRO) products in the multifamily and hospitality markets. "The MRO customer is highly valued by The Home Depot, and this acquisition will position the company to accelerate sales growth by better serving both existing and new customers in a highly fragmented $55 billion marketplace," said Home Depot CEO Craig Menear.
Shares of Home Depot were up about 0.5% in the early afternoon on the news, while shares of HD Supply had soared 24%.
IBM acquires TruQua
Tech giant IBM has been remaking itself as a hybrid cloud computing company for years. The company paid an eye-watering $34 billion for Red Hat last year, and it recently announced the planned spinoff of its managed infrastructure services business, which will allow it to focus more intensely on its best growth opportunities.
Part of IBM's hybrid cloud push is helping its clients transform their IT operations. On Monday, IBM announced an agreement to acquire TruQua Enterprises, an IT services provider and consulting SAP development partner focused on finance and analytics solutions for large companies.
IBM believes this acquisition will bolster its ability to help clients migrate financial platforms from legacy systems to SAP. IBM has already helped more than 400 businesses transform their enterprise systems as part of its existing partnership with SAP. "IBM will leverage TruQua's extensive experience in SAP S/4HANA Finance & Group Reporting solutions to deliver better business outcomes, enabled by intelligent workflows and hybrid cloud," said Rahul Kalia, IBM global managing partner for enterprise cloud applications.
Shares of IBM were up 1.1% early Monday afternoon, rising with the broader market.
Cisco acquires Banzai Cloud
Networking hardware giant Cisco also has its eyes on the cloud. The company announced on Monday that it had agreed to acquire substantially all of the assets of Banzai Cloud, a company based in Budapest, Hungary, that is focused on building software tools that solve pain points for cloud-native, container-based development.
This is the second recent acquisition by Cisco focused on cloud-native software. The company completed its acquisition of cloud-native security company Portshift in October. Security is a key growth area for Cisco; the security segment grew in its latest quarter as the company's other core segments suffered steep sales declines.
Shares of Cisco were up about 1.7% by early Monday afternoon. The stock rallied after reporting quarterly results and providing optimistic guidance last week.