After the company revealed that it will be acquired by two private equity firms, shares of CommerceHub (NASDAQ: CHUBA) (NASDAQ:CHUB.K), which helps retailers and brands compete online, jumped 23% as of 10:45 a.m. EST on Tuesday.
CommerceHub announced today that it has agreed to be purchased by GTCR and Sycamore Partners. The deal values CommerceHub at $1.1 billion.
Other key details are as follows:
- Shareholders will receive $22.75 in cash per share once it closes.
- CommerceHub's board of directors has unanimously approved it.
- The transaction is expected to close in the third quarter of 2018.
CommerceHub founder and CEO Frank Poore had this to share with investors:
This is a significant milestone for CommerceHub and a very positive outcome for our stockholders. GTCR and Sycamore recognize the power of CommerceHub's platform and our unique ability to transform how retailers and brands drive growth through e-commerce. Our customers rely on CommerceHub as a strategic partner to enable their most critical growth strategies, and we are confident that our relationship with GTCR and Sycamore will accelerate the development of our platform and solutions to enable the future of retail.
Given the news, it isn't hard to figure out why shares are rallying today.
A handful of law firms have already announced their intention to investigate this deal to find out if the board shopped the company around enough to ensure that it is getting the highest price possible. You could argue that the lawsuits are warranted since the $22.75 buyout price is below the $24.53 at which the shares were trading in August 2017.
However, the board has unanimously approved this transaction, and it probably won't be hard for GTCR and Sycamore Partners to get their hands on the $1.1 billion they need to complete this transaction. That makes the odds pretty slim that the company will receive a higher bid from another buyer.
As a recent CommerceHub shareholder, I was hoping that this company would be able to pump out fast profit growth for years to come, so I'm quite disappointed to learn that it has agreed to be acquired by private equity. However, there's not much that us little guys can do at this point but sit and wait to see if another offer emerges.