Is the Borderfree Buyout Timely for Shareholders?

By Chris Lange Published May 6, 10:35AM EDT

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Another major mover in Wednesday’s trading session was Borderfree Inc. (NASDAQ: BRDR), which reported its first-quarter financial results and at the same time announced an agreement to an acquisition by Pitney Bowes Inc. (NYSE: PBI). Shareholders of Borderfree may be happy for this buyout as it has stopped the bleeding.

Borderfree operates in global e-commerce, specifically as a technology and services platform that brands rely on to expand globally and transact with customers in over 100 countries and more than 60 currencies worldwide.

As for the financial results: Borderfree reported a net loss of $0.09 per share on $24.8 million in revenue. In the same period of the previous year, it had no earnings and $26.5 million in revenue.

Borderfree’s cash balance was $72.3 at the end of March 2015, compared to $121.4 million at the end of the first quarter in 2014.

Back in January, Borderfree purchased Bundle Tech for $22.0 million of its available cash. Bundle Tech is the operator of DutyCalculator, a provider of cloud-based global trade and customs compliance data services.

As for the acquisition: both companies entered into a definitive agreement that Borderfree will by acquired in an all cash transaction for $14 per share. This is a premium of over 100% from the previous closing price ($6.79).

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Looking at the chart: Borderfree shares entered the market at $21 back in March of 2014, but the stock has been on a steady decline since that point. Shareholders who have only recently bought into Borderfree are most likely really happy with this deal, while those who have been in it for the long haul might just be glad that the bleeding was stopped.

Marc B. Lautenbach, president and CEO of Pitney Bowes, commented on the acquisition:

The combination of Borderfree’s cross-border ecommerce capabilities with our own solutions expands our portfolio of offerings and extends our global reach. We’ve had a long-standing relationship with Borderfree and know the company well. Together, we have a significant opportunity to help our clients expand and grow by providing a comprehensive range of complementary, cross-border ecommerce solutions in the fast-growing global ecommerce marketplace.

Wednesday morning, shares of Borderfree were up over 100% at $13.97, in a 52-week trading range of $5.70 to $17.79. The stock has a consensus analyst price target of $11.00.

Pitney Bowes shares were down 1.2% at $22.40. The consensus price target is $27.75, and the 52-week trading range is $21.15 to $28.37.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.