What happened

Shares of Aegion (NASDAQ:AEGN) leaped more than 21% at 10:45 a.m. EST on Tuesday. Driving the surge in shares of the infrastructure company was a merger agreement with investment firm New Mountain Capital. 

So what

New Mountain Capital has agreed to acquire Aegion in an all-cash deal valuing the infrastructure maintenance company at $963 million, including debt. The $26-a-share offer represents a 21% premium to Aegion's closing price last Friday and a 28% premium to the average price over the previous 30 trading days. 

Two people shaking hands with pipelines in the background.

Image source: Getty Images.

The transaction follows a multi-year strategy by Aegion's current management team to streamline and refocus the company. As part of that streamlining process, Aegion had planned to sell its energy service segment to reduce its exposure to the oil and gas sector and sharpen its focus on its portfolio of pipeline rehabilitation technologies. However, New Mountain Capital plans to review this process to determine what best positions the company for long-term success. 

Aegion expects its deal with New Mountain Capital to close in the second quarter, assuming it receives the necessary shareholder and regulatory approvals. 

Now what

Shares of Aegion have spiked to right around the offer price, implying that investors anticipate a higher offer might emerge. While that's possible, there's no guarantee a competing bid will occur, nor that this deal will go through. Because of that, existing Aegion shareholders might want to consider cashing in now rather than risk seeing the transaction fall apart.

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