Shares of Xactly Corporation (NYSE: XTLY) jumped 35.3% in the month of May, according to data provided by S&P Global Market Intelligence, as the cloud-based enterprise incentive compensation solutions company agreed to sell itself to a private equity firm.
Some of Xactly's rise occurred earlier in the month on May 18, 2017, when analysts at Oppenheimer Holdings reiterated their outperform rating and a $17-per-share price target on the stock. To justify its bullishness, Oppenheimer cited a survey of customers that affirmed its optimism "since the market remains mostly unautomated and still in the early stages of a SaaS replatforming cycle," according to StreetInsider.
But it turned out that Oppenheimer wasn't the only fan of Xactly's work. Shares popped another 16% on May 30, 2017, when Xactly revealed it had struck an agreement to be acquired by Vista Equity Partners for $15.65 per share.
Xactly founder and CEO Christopher Cabrera called it a "very positive event for our stockholders," noting it viewed Vista as "the ideal partner to accelerate our growth initiatives and enable Xactly to focus on innovation and customer success."
That's not to say everyone is pleased with the current situation. The agreed acquisition price represented a 31% premium to Xactly's three-month volume-weighted average price. But multiple law firms have noted it was also well below several analysts' target prices for the stock, so announced investigations into whether the company breached its fiduciary duty to shareholders, and whether Vista is underpaying for the deal.
For now, however, the transaction is still expected to close some time in the third quarter of this year. With the stock trading at exactly the acquisition price -- and barring the unlikely event that a better offer comes down the pipe -- investors would be wise to take their profits and put them to work elsewhere.