NEW YORK (TheStreet) --Patriot National (PN) shares are flying 21.33% to $8.45 on Thursday after the company said that it closed a rescission and exchange agreement with certain institutional investors.
Based in Fort Lauderdale, FL, Patriot National provides various outsourcing solutions within the workers compensation marketplace for insurance companies, employers, local governments, and reinsurance captives in the U.S.
Under the deal, the company will repurchase all of the 1.67 million common shares, which were previously issued on December 16.
The company will buy back on the same price as the stock was issued at, which sums up to $20 million, which will eliminate any dilutive effect on existing stockholders, the company noted.
Additionally, Patriot National will exchange the previously issued warrants to the investors for new warrants to purchase up to an aggregate of 3.25 million shares of common stock. These shares will be purchased from the selling stockholder, meaning that the exchange will also result in no dilution to existing shareholders.
"The decline in our stock price since the closing of the original transaction has had a meaningful impact to our stockholders," CEO Steven Mariano stated. "Following many productive conversations with our investors, the company worked diligently with the private placement investors and mutually agreed to rescind the company portion of the transaction."