Shares of Select Interior Concepts (SIC) were higher by 29.5% as of midday Monday, on the heels of an acquisition offer from a Sun Capital Partners affiliate.
Sun Capital Partners is looking to take Select Interior Concepts, a maker of interior finishing products, private. It's offering shareholders $14.50 per share in cash for a total deal value of $411 million. The bid is 32% higher than Friday's closing price, although the stock's present price of $14.26 is a bit below the actual offer.
While the board of directors has agreed to the terms of the deal, a majority of shareholders will still need to approve the transaction, expected to close early in the fourth quarter of this year. Once completed, Select Interior Concepts will cease to be a publicly traded name, and will instead be privately held.
As is typically the case with any buyout, some investors and litigators will question the adequacy of the offer, or question the privatization decision altogether. Such legal wrangling and negotiation rarely bears fruit though, in light of the premium price being put on the table. Investors may have purchased the stock with the intent of holding it for the long haul, but the scenario has changed for the better.
Given this, the ideal move that shareholders can make here is to sell, locking in what is a sizable gain regardless of when the initial investment was made. The stock is not quite trading at private equity firm Sun Capital's per-share offer, but it's near enough to that mark that the opportunity cost linked to the passage of time comes into play. It's also worth noting that some brokers might charge a fee for facilitating such reorganizations, bolstering the case to make an exit sooner rather than later.