By Rob Curran
Shares of military contractor Emcore rallied after aerospace holding company Velocity One agreed to buy it for $3.10 a share in cash, a 31% premium to Thursday's closing price.
Emcore surged 27% to $3.01 in premarket trading.
Velocity One's agreement to buy the New Jersey-based provider of military-grade navigation equipment was backed by investment firm Charlesbank Capital Partners. The deal is subject to approval by shareholders, as well as other conditions. In the event the deal doesn't go through because of a superior offer or other conditions, Emcore would be subject to a $1.5 million breakup fee.
Velocity One will add Emcore to two other aerospace-manufacturing firms under its holding-company umbrella: Cartridge Actuated Devices, which makes energetic devices, and Aerosphere Power, a maker of power systems for commercial and military applications.
Shares of Emcore closed Thursday at $2.37. Based on 9.1 million shares outstanding, the deal would value the company at about $28.2 million.
In August, Emcore posted a fiscal third-quarter loss of $16.9 million on revenue of $20.4 million.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
November 08, 2024 08:13 ET (13:13 GMT)
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