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Why Edwards Group Ltd. is Up More Than 18 Percent

Stock Chart And MoneyEdwards Group Ltd. (NASDAQ: EVAC) was up more than 18 percent Monday on news that the British vacuum products maker, which held its initial public offering a little more than a year ago, was being purchased by Swedish industrial group, Atlas Copco.


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The buyout, valued at up to $1.6 billion will come at a price of as much as $10.50 a share, according to Jim Cramer’s The Street. The purchase breakdown includes a cash payment of $9.25 a share plus as much as $1.25 a share additional, depending on Edwards’ final revenue and EBITDA figures for this year.

The deal, which both companies are describing as a merger will result in a new Vacuum Solutions Division, headquartered in Crawley, England, where Edwards is located now.

Both companies’ boards have recommended that shareholders accept the offer. Eighty four percent of Edwards’ stockholders have agreed to vote yea when the deal comes up.

According to Bloomberg, this is Atlas Copco’s biggest purchase in 14 years and follows six other takeovers this year.

The two largest shareholders of Edwards stock are CCMP Capital Advisors LLC and Unitas Capital Pte. Each holds more than 42 percent of shares, possibly accounting for the 84 percent favorable vote already gathered.

The deal will be financed with existing funds, Bloomberg said, and is expected to close in the first quarter of 2014.

[stock-tools exchange="NASDAQ" symbol="EVAC" image_height="230" image_width="350"]

Disclosure: At the time of this writing, the author had no position in the company mentioned.

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