Update (4:15 p.m.): Updated with Monday market close information and one-year high price.
The deal is for $11.75 a share; Nordion closed at $11.53 on Monday.
"This transaction delivers value to our shareholders and is a good strategic fit for Nordion", said Nordion CEO Steve West. "We believe this partnership is beneficial to Nordion's employees and our customers, as Nordion and Sterigenics combine their global expertise, industry knowledge and the same focus on high quality standards and values. This transaction also marks the successful completion of Nordion's strategic review."
Nordion is one of the world's leading producers of molybdenum-99, an isotope used for medical imaging.
The stock closed up 10.76% to $11.53, up $1.12 from its previous close of $10.41, on Monday. More than 29 million shares changed hands, more than 10 times its average volume of 254,277. The stock hit a low of $11.50 for the day and holds a one-year low of $6.56.
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TheStreet Ratings team rates NORDION INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate NORDION INC (NDZ) a BUY. This is driven by a few notable 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 13.2%. Since the same quarter one year prior, revenues rose by 32.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NDZ's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.83, which clearly demonstrates the ability to cover short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, NORDION INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for NORDION INC is rather high; currently it is at 52.88%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 49.79% significantly outperformed against the industry average.
- You can view the full analysis from the report here: NDZ Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.