Market Overview

eResearch Technology to be Taken Private

Yesterday it was reported by several research firms that eResearch Technology (NASDAQ: ERT) will soon see the last of its publicly traded days, as private equity firm, Genstar Capital, is set to acquire the cardiac safety solutions company for $8 a share.

In response to the news, Benchmark and Citi issued updates and downgraded the company.

Walking down memory lane, Benchmark had previously rated ERT Buy in February, commending the company's expanding capacity and efficiency. Much has changed since, as Benchmark has now put a Hold on the shares.

“We are downgrading ERT shares to Hold from Buy (issued in late February) as they are trading nearly at the agreed sale price. Our price target is unchanged at $8.00. We anticipate this transaction will close in Q3 this year. We do not anticipate any higher bid but that is possible because the transaction remains subject to shareholder approval. We believe this deal will close at the current terms because it has received unanimous support from ERT's board of directors and has the support of Blum Capital, which owns approximately 9% of the Company,” Benchmark said in its Tuesday morning report.

The transaction, valuing the company at about $400M, was not necessarily kept secret. It was mentioned back in January that eResearch was shopping its sale around for quit some time.

“Given that it's been nearly three months since then, we believe that the sale of ERT has been fully shopped and vetted and do not expect further bidders. Our overall impression of a methodical management team unlikely to act without proper due diligence supports our view,” Citi said in its report.

Left to dominate the publicly traded Cardiac Safety market? NewCardio (OTC: NWCIE), a wholly owned subsidiary that focuses on the research, development and commercialization of products and services for the non-invasive diagnosis and monitoring of cardiovascular disease (CVD).

The ERT/Genstar merger is set to take place later this year.

ERT is currently trading at $7.91, up +25.56% YoY.

Posted-In: BenchmarkAnalyst Color News Downgrades Topics M&A Analyst Ratings General Best of Benzinga

 

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