Please ensure Javascript is enabled for purposes of website accessibility

Why EXFO Stock Skyrocketed on Monday

By Daniel Sparks - Jun 7, 2021 at 12:36PM

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 tech company is getting bought out by its founder at a huge premium.

What happened

Shares of EXFO Inc. (EXFO) surged on Monday, rising more than 60%.

The communications equipment company's shares are trading higher after the company announced a deal to go private later this year as part of an all-cash transaction.

A chart showing a stock price rising.

Image source: Getty Images.

So what

Highlighting why the tech stock is trading more than 60% above where it was trading last week, the deal price is $6 per share -- a 63% premium to the stock's 20-day volume-weighted average trading price. EXFO shareholders, of course, will receive $6 of cash per share they own if the deal closes.

The buyout is led by EXFO's founder, executive chairman, and majority shareholder, Germain Lamonde.

Now what

The deal, of course, is subject to court approval, a shareholder vote, and other customary closing conditions. EXFO estimates the buyout will close no later than Sep. 30, 2021.

Lamonde says he plans to remain with the company. "My objective is to continue working with our talented management team and employees globally to further develop what has become a successful global Test and System provider while maintaining its headquarters in Quebec City," he said in a press release about the deal.

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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

EXFO Inc. Stock Quote
EXFO Inc.
EXFO

*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 analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

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.