Shares of Electronics for Imaging (NASDAQ: EFII) popped 38.3% April, according to data from S&P Global Market Intelligence, after the digital printing technology company agreed to be acquired.
The stock jumped around 29% on April 15 alone — the first trading day after it announced it will be acquired by private equity firm Siris Capital in an all-cash deal for $37 per share.
The acquisition values the company at $1.7 billion, good for a nearly 26% premium to the previous day’s close and a 45% over its 90-day volume-weighted average price.
“We believe this transaction delivers superior and immediate value to our shareholders while providing us with a partner that can add strategic and operational expertise to our business,” added CEO Bill Muir. “We are excited to partner with Siris’ highly experienced team on this next phase of growth for EFI.”
As it stands, EFI is still permitted to solicit alternative acquisition offers during a “go-shop” period that expires 45 calendar days from the April 15 announcement, which explains why shares are currently trading around $0.32 per share above the agreed acquisition price.
Assuming it doesn’t find a superior bid between now and then, and if it passes the approval of both regulators and shareholders, the acquisition should close by the third quarter of 2019. So, unless waiting a little longer to sell will ensure more favorable long-term capital gains tax treatment, or you’re willing to bet another suitor will spark a bidding war over the next month or so, I think investors would do well to take their profits and put them to work elsewhere.
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