NEW YORK (TheStreet) -- Shares of Informatica Corp. (INFA) are higher by 4.41% to $47.85 at the start of trading on Tuesday morning, after the company announced it has entered into an agreement to be acquired by a company controlled by the Permira Funds and Canada Pension Plan Investment Board for approximately $5.3 billion.
As part of the agreement Informatica shareholders will receive $48.75 in cash for each share of the independent provider of enterprise data integration software and services' common stock.
"After careful consideration and deliberation of strategic alternatives, our Board of Directors unanimously concluded that the sale of Informatica to the Permira funds and CPPIB is in the best interest of all Informatica stakeholders," Informatica CEO Sohaib Abbasi said in a statement.
"While delivering immediate compelling value to our shareholders, we remain committed to the long-term success of our customers, partners, and employees. Permira and CPPIB share both our vision for Informatica to power the data-ready enterprise and our conviction in sustained long-term growth," Abbasi added.
Separately, TheStreet Ratings team rates INFORMATICA CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate INFORMATICA CORP (INFA) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and reasonable valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- INFA's revenue growth has slightly outpaced the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 10.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- INFA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, INFA has a quick ratio of 1.95, which demonstrates the ability of the company to cover short-term liquidity needs.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- INFORMATICA CORP has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, INFORMATICA CORP increased its bottom line by earning $1.03 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $1.03).
- You can view the full analysis from the report here: INFA Ratings Report