Blackboard Buyout Arrives, At Full Value (BBBB)

Banking, finance, and taxes

Published: July 1, 2011 8:37 am

Last Updated: March 26, 2020 4:27 pm

Blackboard Inc. (NASDAQ: BBBB) did get its buyout from private equity firm Providence Equity Partners. The deal is an all-cash buyout valued at $1.64 billion plus the assumption of approximately $130 million in net debt. If you are one of those investors who likes to buy merger stocks in hopes of a higher buyout price, we would caution that we have already noted how the price is effectively at full-value already.

Blackboard shareholders will get a $45.00 per share buyout from Provident. The transaction premium is tiny compared to the $43.39 close yesterday, but this is actually a premium of about 21% since the April 18, 2011 close. It was the next day that Blackboard made its public announcement that it was evaluating strategic alternatives.

What is interesting is that press release related back to April 18 as that “strategic alternatives” date, but the following was noted: “The agreement between Blackboard and Providence concludes a process that began in March 2011, when Blackboard’s Board of Directors formed a Transaction Committee consisting of independent Directors to conduct a comprehensive review of strategic alternatives that included discussions with potential strategic and financial buyers.”

Blackboard’s board of directors has approved this deal and the recommendation is for shareholders to approve this deal. This merger is not expected to close until the fourth quarter of this year.

We considered the last “news-pop” to be a full-valuation already. The only difference here that may come up ahead is that Blackboard may need to be considered more of a broad-based real-time collaboration and communications suite rather than what most consider it as: an education communications system.

After the $43.39 close, shares are trading at $44.15 after being lifted from the halt. Blackboards’s 52-week trading range is $32.55 to $50.26, but that $50 price was after the hype of strategic alternatives. Sometimes traders will pay up far too much in valuation just because a company thinks it can find a buyer.

JON C. OGG

Want to Retire Early? Start Here ^(Sponsor)

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.