What happened
Quotient Technology (QUOT) shareholders had a great to start to the trading week. The digital promotions and media tech specialist's stock jumped 16% in early trading, compared to a nearly 1% drop in the S&P 500.
The rally put Quotient back nearly in line with the wider market's 14% increase so far in 2023. It was powered by news that the company just struck an all-cash deal to go private.
So what
Quotient announced before the market opened that it had reached a deal to be purchased by Neptune Retail Solutions, a multichannel retail marketing specialist. The agreed-upon price for the business is $430 million, which works out to roughly $4 per share in cash.
Shares had been valued that high as recently as February and were priced much higher during the pandemic, back when digital advertising spending was more robust. Still, Quotient's management team described the buyout as a positive for the business and for shareholders. "Today's announcement is an exciting next step in our journey in the growing retail media industry," CEO Matt Krepsik said in a press release.
Now what
Quotient's stock is currently trading slightly below the agreed-upon purchase price, mainly because the deal's closure isn't completely certain. After all, it will take time to complete the process, and the deal has to clear regulatory review and meet shareholder approval.
Still, if everything goes according to plan, the company's stockholders will receive $4 per share in cash sometime over the next six months. Investors can receive almost all of that value by selling now. After the deal's closure, Quotient will become part of Neptune Retail Solutions and will no longer trade on public markets. As a result, further positive returns are essentially capped for this stock.
