American Science & Engineering, Inc. (NASDAQ:ASEI) shares were up 14.04% to $36.58 following reports that the company will be bought by OSI Systems for $269 million in cash. The company has a market cap of $269.78 million at 7.13 million shares outstanding so the acquisition deal could essentially double its value. OSI Systems will get the funds from a combination of balance sheet cash and borrowings from its existing credit line.
American Science & Engineering is a company that develops, manufactures, markets and sells X-ray inspection and other detection products for homeland security, force protection and other critical defense applications. It also manufactures X-ray inspection products that can be used to inspect parcels, baggage, vehicles, pallets, cargo containers and people, as well as provides maintenance, warranty, engineering and training services related to these products.
Meanwhile, OSI Systems is a technology provider to homeland security and other markets. With their offer, shares of American Science & Engineering would be valued at around $37. According to OSI Systems CEO Deepak Chopra, this is their company’s largest acquisition to date as American Science & Engineering’s technology and network could complement OSI’s existing operations.
The capabilities of our respective organizations are extremely well-matched. We expect our customers and employees to benefit substantially from the combination of our technology-driven businesses,” said President and CEO of American Science & Engineering Chuck Dougherty.
The companies are also expected to save around $18 million before taxes with this buyout plan in the first two years after the deal closes. These savings comprise synergies in optimizing global business development and administration, manufacturing and supply chain infrastructure, as well as the elimination of redundant public company costs. The deal is still pending shareholder and regulatory approval but is expected to close by the end of the year, which coincides with OSI System’s end of fiscal year.
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