NEW YORK (TheStreet) -- Shares of UTi Worldwide (UTIW) were gaining 47.6% to $6.97 on Friday following the announcement that Danish transport company DSV will acquire the Long Beach-CA based shipping company in a deal valued at about $1.35 billion.
DSV will buy all outstanding shares of UTi for $7.10 a share in cash under the acquisition agreement. The deal represents a 34% premium over UTi's 30-day weighted average trading price, and a 50% premium over its Thursday closing price.
The acquisition is expected to close between January 1, 2016 and March 31, 2016.
"For our clients and employees, the potential combination of our two businesses has a strong cultural fit, aligned strategy, and a complementary client base and geographic footprint," UTi CEO Ed Feitzinger said in a statement. "We have the opportunity to draw on the current strengths and scale of both companies to bring solutions to our clients that we could not have delivered on our own."
About 39.1 million shares of UTi were traded by 9:34 a.m. Friday, well above the company's average trading volume of about 1.3 million shares a day.
TheStreet Ratings team rates UTI WORLDWIDE INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate UTI WORLDWIDE INC (UTIW) a SELL. This is driven by multiple 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, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.