Will LoJack Go for the Buyout Bid This Time? Is It Enough?

Despite markets being generally flat over the course of 2015, we can always look to mergers and acquisitions (M&A) as a driver of returns, even on a flat year. LoJack Corp. (NASDAQ: LOJN) shareholders are seeing this as the stock hit new highs on Thursday, but the question is whether they will take the offer this time and realize these returns. CalAmp Corp. (NASDAQ: CAMP) announced a bid on Thursday morning to acquire LoJack for the price of $5.50 per share. The entire transaction is valued at approximately $113 million.

Currently the offer represents a premium of 58% to LoJack’s closing price from Wednesday ($3.48) and a 75% premium to the average closing price over the past 60 days. Not to mention, this is a premium of 24% from the previous 52-week high.

LoJack has been the target of CalAmp for nearly two years. During this time, the company tried to engage LoJack in friendly discussions regarding a combination of the two companies, and in the past 14 months it has also made three all-cash offers to LoJack.

Unfortunately for CalAmp, none of these previous offers were enough for LoJack’s shareholders, and the company itself has not demonstrated a willingness to be acquired. The $5.50 per share offer is the highest premium that LoJack’s shareholders have seen out of the previous three offers.
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Michael Burdiek, president and CEO of CalAmp, commented on the bid:

The combination of LoJack’s world renowned brand and strong relationships with CalAmp’s leading portfolio of wireless connectivity devices, software, services and applications would create a market leader that is well-positioned to drive the broad adoption of vehicle telematics technologies and applications worldwide. Moreover, we respect and admire the talented team at LoJack and believe that the benefits of a business combination are significant for stakeholders of both companies. The Board of Directors of CalAmp unanimously supports this offer and believes, with close cooperation and focus among our respective teams, we can move expeditiously to complete due diligence and execute a definitive agreement. We look forward to LoJack’s careful and serious consideration of our offer and remain ready to engage with LoJack’s Board of Directors to complete this transaction.

Shares of LoJack were trading up 46% at $5.08 Thursday, with a consensus analyst price target of $5.00 and a 52-week trading range of $2.03 to $5.27.

CalAmp shares were trading up over 9% to $20.27, with a consensus price target of $25.65 and a 52-week range of $14.01 to $21.82.