Why Aeroflex Holding Corp. Shares Soared

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 Aeroflex  (NYSE: ARX  ) surged 25% today after British aerospace and defense supplier Cobham agreed to acquire the microelectronics specialist for about $920 million.

So what: The all-cash deal values Aeroflex at $10.50 per share and represents a premium of 26% to its Monday closing price. Cobham is making the move to gain exposure to fast-growing markets that need more data, connectivity, and bandwidth, with the deal expected to be significantly accretive to its underlying earnings in 2015.

Now what: The transaction, which is subject to regulatory approvals and customary closing conditions, should close in the third quarter of 2014. "This all-cash, premium transaction provides significant and immediate value to our stockholders," said Aeroflex CEO Len Borow in a press release. "We believe Aeroflex and Cobham are a natural fit and that Aeroflex will benefit from the larger scale, market presence, and resources of the combined organization. We look forward to working with Cobham to ensure a seamless integration for our teams and customers around the world." So while Aeroflex shares are likely all popped out at this point, other small caps in the radio frequency space might be worth looking into for some healthy hidden value.

The biggest thing to come out of Silicon Valley in years
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2965129, ~/Articles/ArticleHandler.aspx, 10/21/2014 9:52:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement