ACETO (ACET) Stock: Climbing On Stalking-Horse Agreement

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ACETO Corporation (NASDAQ: ACET) is having an incredibly strong start to the trading session in the market this morning, and for good reason. The company announced that it has entered into a stalking-horse agreement to sell an asset.

As you could imagine, the news proved to excite investors who are sending the stock on a run for the top. Today, we’ll talk about:

  • The stalking-horse agreement;
  • what we’re seeing from ACET stock as a result; and
  • what we’ll be watching for ahead.

ACET Announces Stalking-Horse Asset Sale Agreement

As mentioned above, ACETO is climbing in the market this morning after the company announced a stalking-horse agreement. In a press release issued early this morning, the company said that it will be selling Rising Pharmaceuticals.

ACET said that the buyer in the agreement was Shore Suven Pharma, Inc. All in all, Shore Suven Pharma will pay $15 million and will assume operating liabilities and customer obligations related to the required business.

In a statement, William C. Kennaly III, CEO at ACET, had the following to offer:

We are very pleased to have completed a ‘stalking horse’ asset purchase agreement for Rising Pharmaceuticals. With its deep expertise in the generic drugs industry, Shore Suven Pharma ensures a seamless transition of Rising’s portfolio, customer programs and manufacturing and drug development relationships.

Strategically, this proposed transaction will help Rising balance its asset light business model through the opportunity to vertically integrate with a drug development lab and achieve greater control over its business going forward.”

The above statement was followed up by Mr. Venkat Jasti, CEO and Chairman at Suven Life Sciences. Here’s what he had to say:

We are extremely pleased to have this opportunity to expand our global footprint. Leveraging Rising’s product portfolio to become vertically integrated with our well-respected API and finished dose manufacturing capabilities will enable us to better serve U.S. customers.

What We’re Seeing From The Stock

One of the first lessons that we learn when we start to work in the market is that the news leads to moves in the market. In the case of ACETO Corporation, the news proved to be overwhelmingly positive.

After all, the asset sale will drive a significant amount of funding into the company. Moreover, it allows the company to offload a non-core asset, allowing for stronger focus on core assets.

Considering this, it’s not surprising to see that investors are excited, sending the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:51), ACET is trading at $0.19 per share after a gain of $0.041 per share or 27.43% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on ACET. In particular, we’re interested in following the story surrounding the stalking-horse agreement and the use of the funds generated through it. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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