Abaxis Inc (NASDAQ: ABAX) is having an overwhelmingly strong day in the market today after the company announced that it has entered into a merger agreement. Of course, the news led to excitement among investors who are sending the stock screaming for the top. Today, we’ll talk about:
- The merger news;
- what we’re seeing from the stock;
- and what we’ll be watching for with regard to ABAX ahead.
ABAX Announces Merger Agremeent
As mentioned above, Abaxis is having an incredibly strong day in the market today after the company announced a definitive agreement under which it will be acquired. In a press release issued early this morning, the company announced that it has entered into a merger agreement with Zoetis Inc. (ZTS). Under the terms of the agreement, ZTS will acquire ABAX for a price of $83 per share. That brings the total price of the acquisition to about $2 billion. In a statement, Juan Ramón Alaix, Chief Executive Officer at ZTS, had the following to offer:
This acquisition brings Zoetis a company that has a proven, competitive diagnostic platform for growth that we can help to accelerate in the U.S. and worldwide with our global scale and direct customer relationships in approximately 45 countries… Together we can bring more veterinarian customers a broader range of products that fit into our comprehensive solutions and innovations, from prediction and early detection of disease in animals to prevention and treatment. We are very excited by the passion for customers that Abaxis and Zoetis colleagues share.
The above statement was followed up by Clint Severson, Chairman and CEO at ABAX. Here’s what he had to offer:
We see a prime opportunity to grow our business as part of Zoetis… We recently invested in expanding operations in Europe, Latin America, and the Asia Pacific Region, with 20% of revenue in fiscal year 2018 coming from our international operations. Zoetis has the global presence and direct veterinary customer relationships to deliver greater value to more customers around the world and accelerate the growth of our international operations. This acquisition gives recognition to our record of success and the highly skilled, dedicated employees of Abaxis who helped build our company over the course of nearly three decades.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. Not only will Abaxis be acquired, the company will be acquired at a strong premium, returning immediate value to shareholders. So, it’s no surprise that investors are excited and sending the stock on a run for the top. At the moment (10:15), ABAX is trading at $82.75 per share after a gain of $11.00 per share or 15.33% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ABAX. In particular, we’re interested in following the story surrounding the acquisition. While the agreement is definitive and the acquisition has been approved by the boards on both sides of the table, it is still subject to customary closing conditions as well as regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!