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Summary
- Stocks of Canadian company Photon Control Inc (TSX:PHO) shot up by about 17 per cent to closed at C$ 3.63 on Monday, May 10.
- The surge came after tech firm MKS Instruments Inc (NASDAQ:MKSI) announced its plans to acquire Photon Control in an all-cash deal.
- Photon Control, a manufacturer of fiber optic process monitoring systems, also recently announced its first-quarter 2021 earnings.
Stocks of Canadian company Photon Control Inc (TSX:PHO) shot up by about 17 per cent to closed at C$ 3.63 on Monday, May 10.
The surge came after tech firm MKS Instruments Inc (NASDAQ:MKSI) announced its plans to acquire Photon Control in an all-cash deal valued at C$ 387 million.
As per this deal, Photon Control shareholders will receive C$ 3.6 in cash for every share they hold. Its purchase price represents a premium of 26 per cent as compared to the 30-day volume-weighted average price of C$ 2.87 per common share.
Terming the deal as an essential component of MKS Instrument's long-term strategic objectives, President and CEO John TC Lee said that this acquisition will help the company perform better and achieve its objectives.
Photon Control, a manufacturer of fiber optic process monitoring systems, also recently announced its first-quarter 2021 earnings, in which it achieved a revenue of C$ 17.97 million, up from C$ 17.31 million in Q2 2020.
In Q1 2021, its cash and cash equivalents also expanded to C$ 44.2 million.
Source: Pixabay
The company's gross profit stood at C$ 10.4 million while it achieved a net income of C$ 2.96 million in 2021’a first quarter.
In 2020, Photon Control had posted a record adjusted EBITDA of C$ 22.8 million, posting an increase of about 217 per cent year-over-year (YoY).
Photon Control Stock: Buy Or Sell?
Following the acquisition deal, this stock will cease to exist, so holding it is not recommendable. Since the stock is at its highest price, it might also be a good time to consider letting go of this stock.
On the other hand, MKSI stock might be an option to explore. In the past year, the tech stock soared by 71.6 per cent. In terms of its year-to-date (YTD) growth, it beat the S&P 500 Semiconductor Equipment (Sub Industry) Sector to balloon by about 16 per cent.
The stock closed at US$ 174.47 apiece on Monday, down from its 52-week high of US$ 199.44 (April 5, 2021).
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.
