Investing

Are Yodlee and NTELOS Shareholders Getting Enough in Buyouts?

As summer is coming to a close, mergers and acquisitions are coming alive. 24/7 Wall St. has picked out a couple key mergers to take a closer look at. First on the plate is Shenandoah Telecommunications Co. (NASDAQ: SHEN) acquiring NTELOS Holdings Corp. (NASDAQ: NTLS), then Yodlee Inc. (NASDAQ: YDLE) is being acquired by Envestnet Inc. (NYSE: ENV). However the real question behind these acquisitions is if shareholders are getting enough.

After the markets closed Monday, Shenandoah announced that it has entered into a definitive agreement to acquire NTELOS for $9.25 per share in cash for a total equity value of roughly $208 million. Under the terms of this agreement, Shenandoah will acquire all NTELOS stock and operations, including wireless network assets, retail stores and about 298,000 retail subscribers in its Western markets. At the same time, the acquirer will close down NTELOS’s Eastern markets and pay off its outstanding debt of $523 million.

According to analysts, NTELOS is getting a fair deal in the buyout as its stock has a consensus analyst price target of $9.25. This implies a premium of 26.5% from Monday’s close of $7.31. The highest price target from analysts is $12.00.

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Separately, Yodlee and Envestnet announced that both companies have entered into a definitive agreement under which latter will acquire all shares of the former in a cash and stock transaction valued at $18.88 per share, or roughly $660 million on a fully diluted equity value basis. Because Yodlee has roughly $70 million in cash and cash equivalents, the transaction reflects an enterprise value of $590 million.

Yodlee stock has a consensus analyst price target of $17.25, which is actually valued under the price of the transaction of $18.88 per share. Compared to Monday’s closing price of $12.60, the transaction is valued at a premium of nearly 50%. The highest price target from analysts is $19.00.

Shares of NTELOS closed Monday down 1%, at $7.31 in its 52-week trading range of $3.85 to $13.25. In early trading indications Tuesday, shares were up 23.1% at $9.00.

Shenandoah shares closed up 1.6%, at $36.07 in its 52-week range of $23.67 to $37.57. The consensus analyst price target is $35.67.

Shares of Yodlee closed up 0.2% to $12.60. The 52-week trading range is $8.90 to $17.97. In early trading indications Tuesday, shares were up 37.1% at $17.27.

Envestnet shares closed up 2.6%, at $45.21 in its 52-week range of $37.76 to $58.21. The consensus price target is $54.11.

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