What Is Driving The Altra (AIMC) Stock Up 48% Today?

After getting a buyout offer, Altra Industrial Motion Corp. (NASD: AIMC) is soaring on the charts today, rising 48.47% to trade at $59.76 at the last check in early trading.

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Who would be interested in buying AIMC?

Altra (AIMC) declared today that the company has signed a legally binding agreement to be bought out by Regal Rexnord Corporation (“Regal Rexnord”) for around $5.0 billion, calculated on an enterprise value basis. Altra stockholders will receive $62.00 in cash per share of AIMC common stock under the terms of the deal, which is a 54% premium to the company’s closing price on October 26, 2022. There is no finance requirements attached to the deal because Regal Rexnord has fully committed its debt funding.

The Board of Directors of AIMC has decided that selling to Regal Rexnord is in the best interests of the shareholders since it will give them immediate and significant financial value in addition to a compelling premium. Altra will begin a new chapter in its history now that it has found a wonderful home inside the Regal Rexnord.

AIMC Released Preliminary Financial Results:

The third quarter of 2022’s preliminary financial results was also released by Altra.

  • In comparison to the third quarter of 2021, when revenue was $469.3 million, the quarter’s revenue was $466.3 million, a smaller than 1% decrease.
  • After accounting for FX and the purchase of Nook Industries, organic sales growth increased by 1.9%.
  • Revenues from the Jacobs Vehicle Systems business, which the Company sold on April 8, 2022, were included in the Q3 2021 net sales in the amount of $41.3 million.
  • The third quarter of 2022 had a net income of $33.6 million, or 7.2% of revenues.
  • Amounting to $92.1 million, or 19.8% of sales, was non-GAAP adjusted EBITDA.
  • AIMC also had $860 million in net debt at the end of the quarter, with total gross debt of $1.06 billion.

How will AIMC move forward?

The Company now intends to announce its complete 2022 third-quarter unaudited financial results prior to the start of trading on Monday, October 31, 2022. Additionally, the merger agreement has received board approval, and the transaction is anticipated to conclude in the first half of 2023, subject to the usual closing requirements, such as shareholder approval and regulatory approvals. Shares of Altra (AIMC) won’t be listed on any public exchange when the deal is done.