Please ensure Javascript is enabled for purposes of website accessibility

Why ORBCOMM Stock Skyrocketed Today

By Evan Niu, CFA - Apr 8, 2021 at 11:29AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Industrial IoT specialist is going private in a $1.1 billion deal.

What happened

Shares of ORBCOMM (ORBC) have skyrocketed today, up by 51% as of 11 a.m. EST, after the company said it was going private. Private equity firm GI Partners is acquiring ORBCOMM in an all-cash deal that values the satellite telecommunications company at $1.1 billion, including net debt.

So what

GI Partners will pay $11.50 per share in cash to existing shareholders to scoop up ORBCOMM, and shares are now trading within pennies of that offer. ORBCOMM specializes in the Industrial Internet of Things (IIoT) and also offers satellite connectivity services. GI Partners invests in several industries, including data infrastructure.

Man in hard hat and safety vest holding laptop and surrounded by Industrial IoT symbols

Image source: Getty Images.

"This transaction will provide immediate and substantial value to ORBCOMM stockholders, reflecting the tremendous commitment and work of our employees and stakeholders," ORBCOMM CEO Marc Eisenberg said in a statement. "The partnership with GI Partners will provide us the opportunity to rapidly advance our long-term strategy."

Now what

ORBCOMM's board of directors has unanimously approved the deal, but shareholders will also need to sign off on the transaction. A special meeting of shareholders will be held soon so investors can vote on the sale, with the board recommending that shareholders vote in favor of the proposed deal. The company will have a 30-day go-shop period through May 7, where it can solicit competing offers from other potential acquirers.

The deal is expected to close in the second half of 2021. Eisenberg suggested that ORBCOMM will be better positioned to expand its market share in the IIoT sector as a private company.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

ORBCOMM Inc. Stock Quote

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.