Knobias Clip Report (04-11-2008)
Submitted By Knobias ClipReport
TZIX: Shares Climb 15% on Acquisition Agreement
Friday’s session saw bears rejoice as General Electric reported woeful earnings, Frontier Airlines declared bankruptcy, and additional flight cancellations were announced from American Airlines. GE’s earnings fell some 6% and cut their forecasts for 2008.
In the small cap space, a couple of names reported positive news. The TriZetto Group, Inc. (TZIX) announced today that it has entered into a definitive agreement to be acquired and taken private by funds advised by Apax Partners, a growth-focused, global private equity firm with $35 billion in funds under advice and significant expertise in healthcare and technology.
Under the terms of the agreement and plan of merger, TriZetto shareholders will receive $22.00 per share in cash, representing a 29% premium over the 30 calendar-day average closing price of the company’s stock. The transaction is valued at approximately $1.4 billion, including consideration for stock options and shares related to TriZetto’s outstanding convertible notes. BlueCross BlueShield of Tennessee and The Regence Group, both customers of TriZetto, are providing a portion of the funding for the transaction and will be equity investors in the newly private company. Closing was expected to take between four and six months. Shares of TZIX were up 15.5% to $20.39 on the news.
Another name that saw significant action was CopyTele, Inc. (COPY). The Company is involved in the development, production and marketing of its thin flat low voltage phosphor displays and the development, production and marketing of multi-functional encryption products, hardware and software based, that provide information security for domestic and international users over virtually every communication media.
On Friday, the Company announced that the Indian Government had approved the previously announced license agreement between CopyTele and Videocon Industries Limited of India under which Videocon will manufacture and market products, including TVs, utilizing CopyTele’s display technology.
The approval of the Indian Government was the sole condition to effectiveness of the license agreement. Under the agreement, CopyTele will receive a license fee of $11 million from Videocon and a royalty based on display sales by Videocon. The fee is payable in installments over a 27 month period, with the first installment of $2 million payable within 15 days.
With India being one of the fastest growing economies in the world, Videocon could be a perfect match for CopyTele. Videocon is one of the country’s leading business houses with fully integrated consumer electronics and home appliance enterprise with backward integration in Plama, CRT Glass, color picture tubes and other components of consumer electronics. Following the news, shares were up 12.8% to $1.23
With GE’s earnings miss having many in the financial world surprised and somewhat timid about the breadth of the slowdown in the US, the rest of the earnings season could be also disappointing. With that in mind, investors would be wise to watch.
Visit 1800blogger to see all of our industry leading blogs.
