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Highlights:
- The APEN stock soared over 63 per cent in the morning trading on Tuesday.
- The company announced entering into a definitive merger agreement to be acquired by another medical technology leader.
- The transaction is expected to close in the first half of 2023.
The stocks of the medical technology firm, Apollo Endosurgery, Inc. (NASDAQ:APEN) were among the top percentage movers in the morning trading on Tuesday, November 28, as seen by its soaring prices.
Soon after Wall Street trading started on Tuesday, the APEN stock inched up over 63 per cent, which is largely due to a recent acquisition announcement by the company.
Let's take a quick tour of the acquisition announcement and see why the stock went up in the morning trading hours on November 28.
Why is it rising?
Apollo Endosurgery Inc is an Austin, Texas-based medical technology firm that specializes in developing next-gen and less invasive devices. The company provides its services and products for advancing therapeutic endoscopy to treat several gastrointestinal disorders.
The minimally invasive medical device firm, Apollo Endosurgery noted a gain in its stock price, after it announced entering into a definitive merger agreement with Boston Scientific Corporation (NYSE: BSX).
Under the agreement, the former medical technology firm would be acquired by the latter global medical technology leader, in an all-cash deal. The all-cash transaction would provide an enterprise value of around US$ 615 million, the company said. The deal has been approved unanimously by the board of directors of the Texas-based firm.
According to the announcement, the acquisition price would be US$ 10 per share, which represents a premium of about 67 per cent to the closing price of Apollo's common stock on Monday, November 28.
However, the company said that the deal would depend on the satisfactory customary closing conditions, which include approval by the majority of Apollo's stockholders and applicable regulatory approval.
The gastrointestinal conditions-focused company said that it expects the transaction to close in the first half of 2023. Notably, certain stockholders, which represent 8.4 per cent of the total outstanding shares of the common stock of Apollo Endosurgery, have nodded to vote their shares in favor of the deal.
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Bottom line:
The APEN stock was priced at US$ 9.805 at 9:34 am ET on November 28, an increase of 63.42 per cent from its previous close, and its trading volume was over 11.51 million at the same time. Meanwhile, the APEN stock closed at US$ 6 in the prior session.
Apollo Endosurgery would become a fully owned subsidiary of the Marlborough, Massachusetts-based biotechnology engineering firm upon the completion of the transaction. Especially, Piper Sandler & Co. is acting as a financial advisor, while Cooley LLP is serving as a legal advisor to Apollo Endosurgery.
