Electro Scientific Industries, Inc. (NASDAQ: ESIO) is flying early on in the pre-market this morning as news breaks that the company will be acquired. The acquisition comes at an incredible premium to yesterday’s closing price, exciting investors who are sending the stock screaming for the top. Today, we’ll talk about:
- The acquisition;
- what we’re seeing from ESIO stock as a result; and
- what we’ll be watching for ahead.
ESIA Flies On Acquisition News
As mentioned above, Electro Scientific Industries is flying in the pre-market hours this morning after announcing an acquisition. Along with the release of its earnings report, the company announced that it has entered into a definitive agreement to be acquired by MKS Instruments Inc.
The agreement values ESIO at a total of $1 billion, which works out to $30 for each share outstanding. The $30 per share will be paid in cash and represents a premium of 101% to Monday’s closing price on the stock. In an announcement, MKS said that it expects that the deal will add to adjusted earnings and free cash flow within the first 12 months following closing.
ESIO said that it is expecting for closing to take place in the first quarter of 2019. However, it’s important to keep in mind that while the deal is a definitive one, it is still subject to customary closing conditions as well as regulatory approval.
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 ESIO, the news proved to be overwhelmingly positive. Not only did the company release strong earnings, the company will be acquired in a deal that will return incredible value to shareholders. So, it comes as no surprise that investor excitement is causing the stock to make a run to the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:38), ESIO is trading at $29.00 per share after a gain of $14.07 per share or 94.24% 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 ESIO. In particular, we’re interested in following the story surrounding the company’s acquisition. While the agreement is definitive, there’s still a bit of a process ahead of us. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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