Jim Cramer Says Joy Global's Buyout Is A 'Remarkable Deal'
Joy Global Inc. (NYSE: JOY) announced Thursday morning it has agreed to sell itself to Komatsu America Corp, a subsidiary of Japan-based Komatsu Ltd (ADR) (OTC: KMTUY), for $3.7 billion, or $28.30 per share.
The price tag on the deal implies a 48 percent premium to the volume weighted average closing price of Joy Global's stock over the past 90 trading days.
The deal earned the praise of CNBC's Jim Cramer. During his daily "The Mad Dash" segment on Thursday, Cramer suggested that the business combination is a "remarkable deal," especially when factoring in Joy Global's business is coal and copper mining equipment.
"Most importantly, the reason why this company exists is they have maintenance contracts," Cramer expanded. "It's just a fabulous book of business for maintenance — and that has supported them for a very long time."
Meanwhile, investors that bought the stock near its 52-week lows of under $10 are being rewarded with a superior return.
Cramer further praised the deal by adding that Komatsu now owns Joy Global's book of business contracts and it can sell its other divisions, such as tractors, and focus on its newly acquired entity.
Finally, Cramer pointed out that the deal is also significant because it represents the second major M&A move by a Japanese company this week alone — the first being SoftBank Group Corp (OTC: SFTBF) (OTC: SFTBY) $32 billion acquisition of ARM Holdings plc (ADR) (NASDAQ: ARMH).
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