Why ATMI, Inc. Shares Skyrocketed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of ATMI (NASDAQ: ATMI  ) rose 25% Tuesday after it agreed to be acquired by Entegris (NASDAQ: ENTG  ) for $34 per share in cash.

So what: The deal is expected to close in Q2 and values ATMI at $1.15 billion, or roughly $850 million net of cash acquired including $170 million in net proceeds from the recent sale of ATMI's LifeSciences business to Pall

Perhaps best of all for Entegris shareholders, the acquisition is expected to result in annualized cost savings of $30 million, will be immediately accretive to adjusted earnings per share, and should result in a stronger balance sheet to enable faster repayment of the company's debt. 

Now what: This in mind, ATMI shareholders can't expect much more upside considering shares closed today at $33.79 per share, or only pennies below the $34-per-share acquisition price. As a result, I think it's time for ATMI shareholders to take profits and put their money to work elsewhere.

Here are some options
ATMI shareholders could simply turn around and buy shares of Entegris, but keep in mind there's also risk involved since the acquisition isn't a done deal just yet.

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