NEW YORK (TheStreet) -- Shares of Adept Technology (ADEP) were gaining 62.1% to $12.93 on heavy trading volume Wednesday following the announcement that Japanese technology company OMRON (OMRNY) will acquire the robotics company.
OMRON will pay $13 a share in cash to acquire all outstanding shares of Adept. The offer price represents a 63% premium over Adept's Tuesday closing price of $7.98 and values Adept at about $200 million.
The tender offer if expected to start on or about September 23, and the transaction is expected to close on or about October 22.
Adept CEO Rob Cain will continue to lead the company following the acquisition and will report to Omron Management Center of America Chairman, President, and CEO Nigel Blakeway.
About 3.1 million shares of Adept were traded by 9:39 a.m. Wednesday, well above the company's average trading volume of about 58,000 shares a day.
TheStreet Ratings team rates ADEPT TECHNOLOGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ADEPT TECHNOLOGY INC (ADEP) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share. "
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Machinery industry. The net income has significantly decreased by 599.6% when compared to the same quarter one year ago, falling from $0.27 million to -$1.32 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Machinery industry and the overall market, ADEPT TECHNOLOGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$3.86 million or 482.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- ADEPT TECHNOLOGY INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ADEPT TECHNOLOGY INC continued to lose money by earning -$0.07 versus -$0.97 in the prior year. For the next year, the market is expecting a contraction of 157.1% in earnings (-$0.18 versus -$0.07).
- This stock has managed to decline in share value by 2.39% over the past twelve months. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- You can view the full analysis from the report here: ADEP