Monday, December 28, 2009

First deal of the week, AMICAS to go private (AMCS)

Boston-based AMICAS Inc (AMCS), a provider of radiology and medical image solutions, has agreed to acquired for $217million by Thomas Bravo LLC. The offer of $5.35 is a 21% premium to last week's close of 4.42 per share.

From the release:

Under the terms of the agreement, AMICAS shareholders will receive $5.35 in cash for each share of AMICAS common stock they hold, representing a premium of approximately 24 percent over AMICAS' average closing share price during the 30 trading days ending December 24, 2009, and a 38 percent premium over AMICAS' average closing share price during the 90 trading days ending December 24, 2009.

"The agreement with Thoma Bravo provides an attractive all-cash valuation to our shareholders, and we look forward to completing the transaction under the terms of the agreement as expeditiously as possible," saidStephen Kahane MD, president, chief executive officer, and chairman of AMICAS.

As for valuation, it's difficult to put an accurate price on this company. Wall Street expects AMICAS to lose money on a GAAP basis this year, and to earn 28cents per share in 2010, which would be a forward Price-to-Earnings of 19. That could be considered screaming deal for a small company growing revenues 34% in 2010 on top of 78% growth in 2009.

That heady growth might make one wonder why the board of directors voted unanimously for this deal. EPS of -15cents this year, then 28cents the next, could result in 2011 earnings of 50cents per share, and with "growth-oriented" investors paying 17-20 times earnings, this stock could have seen $10.00 per share in a few years. That's likely why the ambulance chasers have jumped on the story.

Copyright 2009 AlphaNinja

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