Shares of Amber Road (NYSE:AMBR) traded up more than 25% on Monday after the provider of global trade management software agreed to go private in an all-cash transaction valued at about $425 million.
Amber Road said Monday it has entered into an agreement to be acquired by privately held E2open for $13.05 per share in cash, a premium of 27.7% over the company's $10.30 Friday close and 45% above Amber Road's 90-day average closing price.
E2open, like Amber Road, provides supply-chain software that helps companies plan, collaborate, and operate their logistics. Amber Road CEO James Preuninger said that the deal will give customers of both companies a more complete offering, adding "the deal will also deliver an excellent return for Amber Road's shareholders."
Amber Road was founded in 1990 and went public in 2014, but the company has been an inconsistent performer. Following the deal announcement on Monday, the stock hit highs not seen in more than three years.
Combining Amber Road with a direct competitor should create better scale and help the combination become more profitable. Unfortunately, investors -- at least for now -- will not have the opportunity to capture that upside.
Given the compatibility between E2open and Amber Road, it seems unlikely another bidder will emerge. Assuming that's the case, investors have the choice of selling now or waiting to receive the $13.05 in cash when the deal closes.