Ardian has entered into a definitive agreement to buy pay service provider PRGX Global for $195 million in cash. PRGX shares rose 4.6% to $7.70 at the close on Thursday.
According to the terms of the deal, the private investment house will pay PRGX Global (PRGX) shareholders $7.71 per share in cash for each share of PRGSX’s common stock representing a premium of 32.7% to the stock’s volume-weighted average price for the 90 trading days preceding the announcement of the transaction.
The deal is led by Ardian’s North America Direct Buyouts team. Following the transaction, PRGX Global will operate as a privately-held company, pending approval from the board.
“We look forward to partnering with the Ardian team to accelerate the launch and delivery of our vision of source-to-pay as fully technology-enabled, accelerating speed to value for clients globally.” said PRGX CEO, Ron Stewart.
On Oct. 27, PRGX’s reported that its Q3 consolidated revenue declined by 1.8% to $41.5 million, beating the Street’s estimates by $1.96 million. The company posted EPS of $0.13 compared to the net loss per share of $0.07 incurred in the year-ago period. (See PRGX stock analysis on TipRanks)
In reaction to the company’s better-than-expected Q3 results, Barrington analyst Alexander Paris, on Oct. 28 raised the stock’s price target from $8 to $9 and reiterated a Buy rating.
Paris said that the company posted stable core revenues “in these uncertain times” with expectations of continued expansion of adjusted EBITDA margins ahead.
From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 2 unanimous Buys. The average analyst price target of $9 implies upside potential of almost 17% to current levels. The share price has already gained 57% year-to-date.
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