Shares of Edwards Group Limited (EVAC) on Oct 4, 2013 gained 0.4% over its previous day’s closing price, as the news of the company’s shareholders approval on merger with Atlas Copco Group was announced.
As per the terms of the agreement entered into on Aug 19, Edwards Group will be acquired by a subsidiary of Altas for roughly $10.50 per share in cash. The whole transaction has been valued at approximately $1.6 billion, including debt.
The per share merger consideration includes $9.25 of fixed cash payment to Edwards Group and the rest ($1.25 per share) is contingent upon the company achieving its guidance for 2013. The company’s value has been fixed at a premium of 11%-26% over Edwards Group's 30 day average closing share price of $8.33 up to August 16, 2013.
Both the parties of the merger agreement have already received a go ahead from their respective board of directors. The merger is likely to consummate in the first quarter 2014.
Edwards Group Limited is an industrial technology company engaged primarily in the manufacture and sales of vacuum products and abatement systems. The merger with Atlas will work in favour of the company’s existing shareholders.
A couple of days back, Edwards Group had increased its third quarter 2013 revenue and net income guidance. The revision was the outcome of solid revenue growth — on the back of the company’s Semiconductor and Flat Panel revenues experienced in the quarter.
The revised guidance range now stands at £177-180 million versus the previous guidance range of £160-175 million provided during the second quarter 2013. Net income is anticipated to grow in excess of previously provided guidance range of £17-25 million.
The Zacks Consensus Estimate for Edwards Group is currently pegged at 94 cents for 2013, representing year-over-year growth of 20.5%. Long-term earnings growth rate stands at 10.0%.
Edwards Group currently has a market capitalization of $1.1 billion. Other stocks to watch out for in the industry are The Babcock & Wilcox Company (BWC), Ingersoll-Rand Plc (IR) and Dover Corporation (DOV), each holding a Zacks Rank #2 (Buy).
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