Analogic this week escaped a class action lawsuit brought over its $1.1 billion go-private sale to Altaris Capital when a Massachusetts federal judge dismissed the case with prejudice.
The $84-per-share deal for Peabody, Mass.-based Analogic, which closed in June 2018, followed an internal review in which the company contacted approximately 75 potential financial and strategic buyers and explored options including a sale of the entire company, separation of its three business units and continued operation as a stand-alone firm.
The lawsuit, filed in June 2018 in the U.S. District Court for Massachusetts, alleged that the company ginned up a rationale to make the then-below-market offer more palatable to investors. Analogic moved to dismiss the case last December.
In an Oct. 1 ruling, Judge Allison Burroughs dismissed the case with prejudice, finding that the plaintiffs failed to show that Analogic’s communications about Alaris buyout were false and misleading. Burroughs also found that the company’s statements, including acknowledgement that the offer was a 12.5% discount to its share price at the time, were protected by safe harbor regulations.
“Defendants provided its shareholders with every projection and financial forecast,” Burroughs wrote. “Reasonable shareholders could therefore appraise the merit of the projections on their own.
“Considering defendants’ transparency concerning the accuracy and reliability of the assorted provided projections, the disclosed interests of the defendants, and Defendants’ statement that the final sale price represented a discount as compared to Analogic’s closing stock prices, the statements in the proxy were not misleading,” she wrote.