Robbins Arroyo LLP: Acquisition of Furmanite Corporation (FRM) by Team, Inc. (TISI) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Furmanite Corp. (NYSE: FRM) by Team, Inc. (NYSE: TISI). On November 2, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Team will acquire Furmanite. Under the terms of the agreement, Furmanite shareholders will receive 0.215 of a share of Team for each share of Furmanite they own, the value of which is equivalent to $7.53 per share of Furmanite.
Is the Proposed Acquisition Best for Furmanite and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Furmanite is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $7.53 merger consideration represents a discount of 3.6% based on Furmanite’s one-month average closing price prior to the company’s announcement of receiving a non-binding indication of interest on May 4, 2015. This discount is significantly below the average one-month premium of nearly 76.8% for comparable transactions within the past three years. Further, the $7.53 merger consideration is significantly below the target price of $11.00 set by an analyst at Sidoti & Company LLC on November 3, 2014, and the target price of $8.00 set by an analyst at Stephens Inc. on August 5, 2015. In the last three years, Furmanite traded as high as $12.70 on January 13, 2014, and most recently traded above the merger consideration – at $7.59 – on July 15, 2015.
On November 6, 2015, Furmanite reported strong earnings results for its third quarter 2015. Total revenue for the quarter was $97.4 million, an increase of 2.4% compared to the same period last year. Operating income for the quarter was $3.1 million, an increase of 24% compared to the same period last year.
In light of these facts, Robbins Arroyo LLP is examining Furmanite’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Furmanite shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Furmanite shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.