DecisionPoint Systems Inc. DPSI shares rallied 24.5% in the last trading session to close at $10.02. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock’s 7.1% loss over the past four weeks.
The increase in share price can be attributed to as the company plans to go private. On May 1, 2024, the company announced that it has entered into a definitive agreement to merge with an affiliate of Barcoding Holdings, LLC (“Barcoding”), in an all-cash transaction.
DecisionPoint stockholders will get $10.22 in cash per share under the terms of the agreement, which is about a 27% premium over the closing price of $8.05 on Apr 30, 2024.
The merger agreement was unanimously accepted by DecisionPoint’s board of directors, as well as suggested that investors vote in favour of the transaction. In the near future, the DecisionPoint will conduct a special meeting and send out proxy to allow shareholders to vote on the transaction. The deal is anticipated to close in July 2024, subject to the approval of DecisionPoint stockholders and the fulfilment of standard closing requirements. Additionally, financing conditions do not apply to the transaction’s closing.
DecisionPoint’s stock will no longer be traded publicly after the deal closes, and the company will become privately held. The DecisionPoint Systems name and brand will be retained by the company going forward.
The combined company will have substantial cross-selling opportunities. Also, DecisionPoint Systems’ managed services will complement Barcoding’s solutions in data capture, printing and labeling and mobile computing.
This company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of -62.5%. Revenues are expected to be $25.85 million, down 4.4% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For DecisionPoint Systems, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock’s price usually doesn’t keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DPSI going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
DecisionPoint Systems is a member of the Zacks Computer – Software industry. One other stock in the same industry, Pros Holdings PRO, finished the last trading session 0.4% higher at $32.88. PRO has returned -7.5% over the past month.
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