NEW YORK (TheStreet) -- Premiere Global Services (PGI) stock is skyrocketing by 22.20% to $13.87 in pre-market trading on Thursday, after the company received a buyout offer from private-equity firm Siris Capital Group.
The offer is worth about $1 billion, and Siris would pay $14 per share of Premiere Global Services under the terms of the deal, which Siris said it would finance through debt, The Wall Street Journal reported.
If Premiere Global Services receives a higher offer during the "go shop" period, when it can seek out additional buyout offers, Siris has the option to then match the competing offer, according to The Journal.
Premiere Global Services is a provider of collaboration software and services based in Atlanta, Ga.
Separately, TheStreet Ratings team rates PREMIERE GLOBAL SERVICES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate PREMIERE GLOBAL SERVICES INC (PGI) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PGI's revenue growth has slightly outpaced the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 0.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for PREMIERE GLOBAL SERVICES INC is rather high; currently it is at 60.58%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.30% trails the industry average.
- Even though the current debt-to-equity ratio is 1.39, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.87 is weak.
- Net operating cash flow has decreased to $17.73 million or 28.54% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, PGI has underperformed the S&P 500 Index, declining 18.82% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: PGI Ratings Report