Xerium Technologies, Inc. (NYSE: XRM) is having an overwhelmingly strong start to the trading session this morning after the company announced that it has entered into a definitive merger agreement. Of course, the news of the merger excited investors, leading to massive gains in the value of the stock. Today, we’ll talk about:
- The merger;
- what we’re seeing from XRM as a result; and
- what we’ll be watching for ahead.
XRM Heads For The Top On Acquisition News
As mentioned above, Xerium Technologies is having an overwhelmingly strong start to the trading session this morning after the company announced that it has entered into a definitive merger agreement. Under the terms of the agreement, Andritz AG will be acquiring XRM for $13.50 per share in an all-cash transaction. Of course, that’s a massive premium. In fact, the price represents a premium of 146.8% to the unaffected share price prior to the announcement that XRM would be reviewing strategic alternatives back on March 19. In a statement, James Wilson, Chairman of the Board at XRM, had the following to offer:
This transaction represents a great outcome for Xerium stockholders, and is a reflection of the effort and accomplishment of our employees. It is also a major step forward for the Company’s long-term business competitiveness and ability to serve customers.
The above statement was followed up by Mark Staton, President and CEO at XRM. Here’s what he had to offer:
We are very excited about this coming together with Andritz. Their prestigious reputation in our industry, as well as their true global scale, provides a compelling opportunity for our own global workforce. I am convinced that Andritz will be a great long term owner of Xerium.
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 causes moves. In the case of Xerium Technologies, the news proved to be overwhelmingly positive. Not only is the company going to be acquired, the acquisition will be happening at an incredibly strong premium. So, it’s no surprise that excited investors are sending the stock screaming for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:24), XRM is trading at $13.27 after a gain of $6.66 per share or 100.76% 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 XRM. In particular, we’re interested in following the acquisition as it plays out. As is normally the case, while the transaction has been approved by both companies, it is still subject to customary and regulatory closing conditions. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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