Why Albany Molecular Is Actually Getting a Very Good Premium

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Shares of Albany Molecular Research Inc. (NASDAQ: AMRI) saw a handy gain on Tuesday after it was announced that the company signed a definitive agreement to be acquired by Carlyle Group and GTCR. Although the price only represents about a 9% from Monday’s closing price, it is actually much more than that considering the stock’s recent trading history.

Under the terms of the agreement, Albany Molecular will be acquired for $21.75 in an all-cash agreement. The board of directors also unanimously agreed to the acquisition. This transaction is still subject to a shareholder vote, which will take place in the third quarter this year.

The stock bottomed out this year in March, around the $13 price level, and since then has made an incredible gain through April and May. The stock has gained roughly 53% to Monday’s close at $20.17. Considering this price, the premium for the acquisition would be closer to 70%.

William S. Marth, president and CEO of AMRI, commented:

This transaction is a strong endorsement of our strategy.  Given their deep healthcare industry expertise and financial resources, Carlyle and GTCR are highly attractive partners for us and offer a compelling opportunity to accelerate our growth and enhance delivery of world-class solutions to our customers.

Dean Mihas, managing director and head of the Healthcare group for GTCR, added:

We strongly believe in AMRI’s strategic direction and have been very impressed with management’s ability to transform the business into a trusted partner for the biopharma industry. We believe AMRI is uniquely positioned to capitalize on an increased trend for outsourcing of pharmaceutical products and services and look forward to partnering with the AMRI team to achieve its strategic objectives and drive value for all of AMRI’s stakeholders.

Shares of Albany Molecular were last seen up 8.7% at $21.49, with a consensus analyst price target of $19.33 and a 52-week range of $12.51 to $22.17.