Bear Stearns stock down on layoffs; Inverness stock up on Bio-Stat merger; Ness shares slip

By Sheri Kasprzak

New York, Oct. 3 - Bear Stearns Cos. is laying off 310 workers due to continued woes in the home lending sector, and the news sent shares of the investment bank down Wednesday.

The stock had dipped by as much as 70 cents Wednesday but ended the session down 29 cents to close at $128.28 (NYSE: BSC). The stock lost another 10 cents after the market closed.

The decision to lay off workers and combine Bear's two mortgage lines is indicative of just how bad the current credit crunch is, an analyst and a sellside trader said Wednesday.

"When it starts hitting the big boys, you know it's gotten bad," said one sellside trader. "It doesn't seem to be hitting them that hard right now. Their stock is down but it's not a substantial amount. I would expect it to drop even more. Maybe there will be a delayed impact."

An analyst familiar with the sector said Wednesday that it was only a matter of time before it reached the large investment banks.

"It really is that bad," he said, adding that any company now that has anything to do with residential mortgages is probably feeling the pinch.

"If you've got a residential mortgage business, it's probably going to be impacted negatively at this point," he said. "It really does seem to be widespread and this really isn't that shocking to me."

Bear Stearns announced plans Wednesday to eliminate 310 positions and combine its home loan business after a drop in profits.

Morgan Stanley and Lehman Brothers have already made similar moves.

M&A activity picks up

Inverness Medical Innovations sealed it acquisition of Bio-Stat Healthcare Group Wednesday, leading a rather light day of merger and acquisition activity.

In other M&A action, Ness Technologies, Inc. settled its acquisition of MS9 Consulting. The announcement sent shares of Ness down slightly Wednesday.

A sellside trader said Wednesday that activity has been a bit stronger over the past couple of weeks as the summer season winds down.

"Things are definitely more active right now than a month or so ago," the sellsider said. "We did see a slump in the summer but that's pretty normal. I would imagine things will continue to build as the year goes on. It always gets a bit crazy near the end of the year."

In the Inverness transaction, the diagnostic products company bought Bio-Stat, a U.K.-based company that manufactures home pregnancy tests, for $33.4 million.

The move comes just weeks after Inverness merged with Cholestech Corp., and in August, Inverness bought Matritech, Inc. in a $36 million transaction.

"It's certainly in line with IMA's [Inverness] acquisition strategy," said one analyst familiar with the diagnostic products company. "If they want to move into another market or another region, they buy up a smaller company. It's more cost-effective for them. We feel it's a good move because it broadens their access to the U.K. market."

Inverness expands in U.K. market

Looking to the Inverness purchase of Bio-Stat, the deal gives Inverness a foothold in the U.K. marketplace, an analyst pointed out Wednesday.

"It's a new market for them and we feel a profitable market at that," said one analyst interviewed Wednesday afternoon.

Shares of Inverness rebounded in late afternoon trading.

By 2 p.m. ET, the stock was down 4 cents. The stock ended the day up 41 cents at $54.75 (Amex: IMA). The stock lost 42 cents after hours.

"We are very pleased to add Bio-Stat to the family of Inverness companies," said Ron Zwanziger, Inverness's chief executive officer, in a news release.

"This acquisition significantly enhances our presence in the U.K. market."

Inverness has headquarters in Waltham, Mass.

Ness buys MS9 Consulting

Moving back to Ness's acquisition of MS9 Consulting, Ness completed its acquisition of MS9 in an $11.4 million transaction.

MS9 may receive additional amounts based on its performance over the next two years.

MS9 provides information technology, business advisory and management consulting services to the life sciences industry. Hackensack, N.J.-based Ness is an information technology services company.

By 10 a.m. ET, Ness's stock was down 5 cents. The stock closed the day down 12 cents, or 1.1%, at $10.79 (Nasdaq: NSTC). The stock climbed by 4 cents after hours.

"The acquisition of MS9 Consulting is another milestone in the strengthening of Ness's activities in the North American market," said Sachi Gerlitz, chief executive officer of Ness, in a statement.

"This acquisition expands our service portfolio and strengthens our presence in the health care and pharmaceutical markets, in which MS9 has built an excellent reputation. This strategic acquisition will enhance our global delivery capabilities and accelerate the expansion of our unique offshore service delivery model within the life sciences vertical."

LivePerson closes Kasamba purchase

Elsewhere, LivePerson, Inc., a New York-based online conversion provider, closed its acquisition of Kasamba, Inc., a company that provides online live expert advice in real time.

In the transaction, LivePerson bought all the outstanding shares of Kasamba for 4.1 million shares of LivePerson and $9 million in cash.

The news sent shares of LivePerson up 21 cents, or 3.26%, to close at $6.66. The stock gave up 8.85 cents in after-hours trading (Nasdaq: LPSN).

"We will provide a web destination where consumers can find expert help in real time," said LivePerson CEO Robert LoCascio in a statement.

"By building an online marketplace where experts can provide trusted advice on a broad range of topics, LivePerson is again redefining the online experience for consumers and our growing customer base of more than 5,000 businesses. We believe this expansion will create a unique value proposition for experts, consumers and our customers."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.