Black Box Corporation (NASDAQ: BBOX) is flying early on in the trading session this morning, and for good reason. The company announced that it has entered into a definitive agreement surrounding the sale of a key asset. Of course, the news proved to be an exciting point for investors who are sending the stock screaming for the top. Today, we’ll talk about:
- The asset sale;
- what we’re seeing from BBOX as a result; and
- what we’ll be watching for ahead.
BBOX Gains On Asset Sale
As mentioned above, Black Box Corporation is having an incredibly strong start to the trading session this morning as news breaks surrounding an asset sale. In a press release issued early this morning, the company announced that it has entered into a definitive agreement to sell its Federal Government IT Services Business to a private equity firm for a price of $75 million. In the release, BBOX said that the transaction will be an all-cash transaction under which the buyer has agreed to purchase 100% of the equity interests of the Federal Business on a debt-free, cash-free basis.
While the transaction is still subject to closing conditions and regulatory approval, it is expected that the transaction will close on or before August 31, 2018. Also, the company said that while this sale is a significant milestone, it also remains focused on exploring all other strategic alternatives with the help of Raymond James and Jones Day surrounding liquidity needs, refinancing, restructuring, and sale of some or all of the remaining business.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Black Box, the news proved to be incredibly positive. The company has been struggling with financial concerns as of late. However, the injection of $75 million in cash funding should help alleviate some of these concerns. So, it comes as no surprise that excited investors are sending the stock through the roof. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:40), BBOX is trading at $2.00 per share after a gain of $0.36 per share or 21.95% 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 BBOX. In particular, we’re interested in following the story surrounding the company’s continued work to cure their financial blues. With the asset sale announcement, the company has made a big step in the right direction, but there’s plenty of work to be done. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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