Graphic Evidence: Immucor Hops M&A Train

Chart: Zignals.com

by Paul Springer

Shares of in vitro diagnostics specialist Immucor Inc. (BLUD) blasted up 30.2% to close at $26.99 Tuesday on news of a private takeover.

Regulatory filings indicate that Immucor’s board approved an acquisition proposal from private equity investor TPG Capital.

If the deal goes through, current investors will receive $27 for each share they own.

The proposal allows Immucor to explore other opportunities, but the one-penny difference between the proposed sale price and Tuesday’s close suggests that the market is banking on a TPR acquisition.

Most Immucor owners probably weren’t expecting to see a 30% jump in value any time soon. The company has hit its share of roadblocks in the last year or two, as recapped by Zack’s Investment Research:

Immucor suffered several setbacks over the past few quarters on the back of a slowdown in the blood industry. Several small donor centers have closed their operations due to lackluster demand arising from the economic uncertainty. Tighter hospital budgets and uncertainty in the healthcare market have affected orders and delayed decision making process. Moreover, higher number of uninsured and underinsured patients negatively influenced the demand in this industry.

Zack’s also said that Immucor lost some traditional reagent customers as it focused on instruments, and it suffered from “quality control issues.”

So who’s the next candidate for a ride on the mergers-and-acquisitions train?  The possibilities are many, but few will generate 30% returns.

One way to find some similar situations is offered by Seeking Alpha, which notes that ValueAct Holdings was Immucor’s biggest shareholder – and that another ValueAct investment, Cephalon Inc. (CEPH), was sold off at a high price this year.

Seeking Alpha examines buyout possibilities for several other ValueAct portfolio companies, including Adobe Systems (ADBE) and Valeant Pharmaceuticals International (VRX).

Meanwhile, investors also have to look out for the flip-side scenario: when a company stakes its future on an acquisition and nothing happens. That situation is more likely than one involving a 30% gain.

Last month, for instance, Amarin (AMRN) lost almost 15% in a few hours and then recovered partially to a 4.2% loss after its chief executive said immediate M&A prospects were poor.

The Motley Fool praised Amarin’s CEO for taking his time to wait for an attractive offer, but investors were not so sympathetic.

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