Cubic (CUB) - Get Report shares were higher on Monday after the transportation- and defense-technology company agreed to be bought by private-equity firm Veritas Capital and hedge fund Elliott Management.
The deal is valued at about $2.8 billion, including assumption of debt.
Shares of the San Diego company at last check rose 9.4% to $69.26.
Under the terms, Cubic holders will receive $70 cash for each of their shares.
That's a 58% premium to the closing stock price on Sept. 18, 2020. That date was the last trading day before the company disclosed that third parties were interested in potentially acquiring Cubic.
The all-cash transaction will be financed through a combination of equity and debt.
Elliott Management, New York, confirmed it had acquired a 15% stake in the company.
"Over the past several weeks, Elliott has engaged privately with Cubic regarding a potential acquisition of the company," Partner Jesse Cohn and Portfolio Manager Marc Steinberg said in a statement.
"In response to the company's decision to make our dialogue public, we can confirm that we have acquired an approximately 15% economic interest in the company and have partnered with a leading private equity firm to pursue this opportunity,"
Cubic's board has approved the terms. The transaction is expected to close during the second quarter, subject to regulatory clearances and shareholder approvals.
Ramzi Musallam, managing partner and chief executive of Veritas, said the New York firm looks forward to "leveraging our expertise in the government technology market ... in partnership with the team at Cubic to accelerate product development and drive growth as Cubic continues to improve the quality of global transportation systems and to deliver innovative defense solutions."