Acquisition Of Globecomm Systems Inc. By Wasserstein & Co. May Not Be In The Best Interests Of Globecomm Systems Inc. Shareholders
SAN DIEGO and HAUPPAUGE, N.Y., Aug. 26, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of Globecomm Systems Inc. (NASDAQ: GCOM) ("Globecomm") by Wasserstein & Co., a private equity firm. On August 26, 2013, Globecomm announced that the company entered into a definitive agreement to be acquired by an affiliate of Wasserstein & Co. pursuant to which Globecomm shareholders will receive $14.15 in cash for each share of Globecomm stock. The merger is expected to close during the fourth quarter of 2013.
Is the Merger Best for Globecomm and Its Shareholders?
Robbins Arroyo LLP's investigation focuses on whether the board of directors at Globecomm is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger. As an initial matter, the $14.15 merger consideration is substantially below the $18.00 target price set by an analyst at Sidoti & Company, LLC on August 2, 2013. In addition, the merger consideration is below the target prices of $15.75 and $15.60 set by analysts at Dougherty & Company, LLC and Noble Financial Group, Inc., respectively, on May 10, 2013. Moreover, Globecomm has traded above the offer price as recently as August 23, 2013, closing at $14.40.Further, on May 8, 2013, Globecomm released its third quarter 2013 financial results, reporting an increase in net income for the quarter of $4.2 million, compared to $2.9 million from the same quarter of fiscal year 2012. Further, Globecomm beat analyst earnings per share estimates for the seventh time in the past nine quarters. In announcing the financial results, David Hershberg, Globecomm Chairman and Chief Executive Officer stated: "Despite several on-going challenges … Globecomm has met our plan for this quarter… We also have a strong pipeline of infrastructure opportunities within our media segment, which bodes well for the coming fiscal year." Given these facts, Robbins Arroyo is examining Globecomm's board of directors' decision to sell the company to Wasserstein & Co. now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects, and whether they are seeking to benefit themselves.
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