Both C.R. Bard (NYSE:BCR) and Rochester Medical (NSDQ:ROCM) got some stock market love today after the companies signed a definitive merger agreement, but Rochester was the clear Wall Street darling with a more than 40% bump in shares by early afternoon trading.
Stewartville, Minn.-based Rochester announced this morning that its board of directors unanimously approved a $20-per-share cash acquisition by Bard, a proposal worth about $262 million in total. ROCM shares jumped from last night’s close at $13.81 to $19.95 as of about 12:30 p.m. today, a $44.5% increase. Bard got a little love of its own, with shares up 1.1% to $115.95 by midday.
The $20-per-share deal represents a 37% premium over ROCM’s average closing price during the 3 months ended Sept. 2, 2013, according to a company report. Rochester plans to encourage its shareholders to sell. If all goes as planned, the transaction should close before the end of the year.
"Our agreement with Bard represents an attractive valuation for Rochester Medical shareholders, and as an all cash offer, provides liquidity for shareholders," Rochester president & CEO Anthony Conway said in prepared remarks. "We believe the merger represents a great opportunity for the combined companies to create a broad product portfolio by offering a more comprehensive range of high-quality urological and continence care products to our customers."
Bard plans to merge Rochester with its Starnorth Acquisition Corp. subsidiary, with Rochester Medical surviving the as a wholly owned subsidiary, according to regulatory documents.
Under the terms of the agreement both Conway and Rochester product technologies vice president Philip Conway have agreed to 5-year non-competition, non-solicitation and non-disparagement covenants, starting at the consummation of the merger.
The acquisition in Bard’s 2nd multi-million-dollar deal in recent weeks. Last month Bard agreed to pay $200 million up front and another possible $80 million for Medafor and its line of anti-bleeding agents.