NEW YORK (TheStreet) -- Shares of Remy International (REMY) are skyrocketing 41.84% to $29.13 in Monday's early morning trading session on massive volume after the auto parts maker agreed to be acquired by motor vehicle parts and systems supplier BorgWarner (BWA) - Get BorgWarner Inc. Report in a $1.2 billion deal, the companies said.
"Our products and capabilities should complement BorgWarner very well and support growing vehicle electrification trends," Remy's CEO Jay Pittas said.
The completion of the transaction is subject to the approval of Remy's stockholders along with certain customary terms and conditions, including antitrust and other regulatory clearances in the U.S. and abroad. The deal is expected to close in the fourth quarter of 2015, the companies added.
About 4.6 million shares of Remy International were traded by 10:25 a.m., above its average trading volume of about 137,000 shares a day.
Remy makes alternators, starter motors and electric traction motors and BorgWarner makes powertrain technology, with product including engine timing systems and air and noise management.
Separately, TheStreet Ratings team rates REMY INTERNATIONAL INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate REMY INTERNATIONAL INC (REMY) a BUY. This is driven by a number of strengths, 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 increase in net income, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 235.2% when compared to the same quarter one year prior, rising from $4.94 million to $16.57 million.
- The current debt-to-equity ratio, 0.56, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.10, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 233.55% to $12.23 million when compared to the same quarter last year. In addition, REMY INTERNATIONAL INC has also vastly surpassed the industry average cash flow growth rate of -32.91%.
- REMY INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, REMY INTERNATIONAL INC reported lower earnings of $0.05 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($0.66 versus $0.05).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.8%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: REMY Ratings Report