Jetpay Corp (NASDAQ: JTPY) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced that it would be acquired at an incredibly strong premium. Of course, the news led to excitement among investors, sending the stock on a run for the top. Today, we’ll talk about:
- The acquisition news;
- what we’re seeing from JTPY; and
- what we’ll be watching for ahead.
JTPY Flies On Acquisition News
As mentioned above, JetPay is having an incredibly strong start to the trading session this morning after the company announced that it will be acquired. In a press release issued early this morning, the company said that it has entered into a definitive acquisition agreement with NCR Corporation.
Under the terms of the agreement, NCR will pay $5.05 per share to acquire JTPY, representing a multiple of 2.9 times the company’s 2018 revenue forecast. The final purchase price comes to a total of approximately $184 million and will be financed through a combination of cash on hand and existing capacity under a credit facility.
In a statement, Michael D. Hayford, CEO at NCR, had the following to offer:
The acquisition of JetPay is a key, strategic initiative that will enable NCR to create a full, end-to-end integrated payments offering for its enterprise-wide POS customers… Enabling payments as part of our transactions is part of our long-term strategy to create integrated value for our clients.
The above statement was followed up by Diane Faro, CEO at JTPY. Here’s what she had to offer:
JetPay has always focused on taking great care of our customers, creating value for our stockholders, delivering innovative solutions, and expanding our market reach… This combination dramatically accelerates our capabilities across these initiatives. NCR’s global footprint, brand recognition and track record of innovation will help us accelerate our strategic objectives and create even more value for our customers.
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 JetPay, the news proved to be overwhelmingly positive. After all, not only is the acquisition going to take place, it is happening at a premium of well over 100%. So, the deal will return a ton of value to shareholders, leading to excitement and pushing the stock for the top. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:01), JTPY is trading at $4.98 per share after a gain of $2.86 per share or 134.91% 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 JTPY. In particular, we’re interested in following the acquisition through to the end. While the agreement is a definitive one, it’s important to remember that the transaction is still subject to the satisfaction of 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!