Aspen Technology AZPN shares soared 3.3% in the last trading session to close at $263.50. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.6% gain over the past four weeks.
The increase in share price can be attributed to Emerson’s announcement of acquisition of remaining shares of Aspen. The deal, structured as an all-cash tender offer, values the minority stake being acquired at $7.2 billion, with a per-share price of $265.00.
This transaction places Aspen’s total market capitalization at $17 billion on a fully diluted basis, with an enterprise value of $16.8 billion.
On Nov. 5, 2024, Aspen announced that it had received an "unsolicited, non-binding proposal" from Emerson to acquire all outstanding shares of the company at $240 per share in an all-cash transaction. Subsequently, Aspen formed a special committee consisting of three independent directors to evaluate Emerson's non-binding proposal. The transaction was approved by Aspen’s Board of Directors following the recommendation of the Special Committee. The Emerson Board of Directors also gave their unanimous approval to the transaction.
Emerson currently holds around 57% of Aspen’s outstanding shares. With the completion of this acquisition, Aspen will become a wholly owned subsidiary of Emerson.
The transaction is anticipated to close in the first half of 2025, subject to customary closing conditions. Emerson plans to fund the transaction through a combination of cash on hand and debt financing. Upon completion of the transaction, Aspen's common stock will no longer be traded on the NASDAQ.
This software maker is expected to post quarterly earnings of $1.85 per share in its upcoming report, which represents a year-over-year change of +35%. Revenues are expected to be $294.5 million, up 14.5% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Aspen Technology, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AZPN going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Aspen Technology is part of the Zacks Internet - Software industry. Alight, Inc. ALIT, another stock in the same industry, closed the last trading session 1% higher at $7. ALIT has returned 0.3% in the past month.
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