Press Ganey Holdings, Inc.
Robbins Arroyo LLP: Acquisition of Press Ganey Holdings, Inc. (PGND) by EQT Partners AB May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Press Ganey Holdings, Inc. (NYSE: PGND) by EQT Partners AB. On August 9, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which EQT Partners will acquire Press Ganey. Under the terms of the agreement, Press Ganey shareholders will receive $40.50 for each share of Press Ganey common stock.
Is the Proposed Acquisition Best for Press Ganey and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Press Ganey is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $40.50 merger consideration represents a premium of only 0.40% based on Press Ganey’s closing price on August 8, 2016. This premium is significantly below the average one-day premium of nearly 35.14% for comparable transactions within the past year. Further, the $40.50 merger consideration is significantly below the target prices of three analysts – $46.00 set by an analyst at BMO Capital Markets on August 2, 2016, $45.00 set by an analyst at Raymond James on August 1, 2016, and $45.00 set by an analyst at Baird on August 2, 2016. In the last three years, Press Ganey traded as high as $41.31 on August 2, 2016, and most recently traded above the merger consideration – at $40.56 – on August 4, 2016.
On August 1, 2016, Press Ganey reported strong earnings results for its second quarter 2016. Press Ganey reported revenue of $91.2 million for the three months ended June 30, 2016, a 17.8% increase from the same period of the prior year. Press Ganey also reported adjusted net income of $16.0 million for the three months ended June 30, 2016, a 46.3% increase from the same period of the prior year. Press Ganey has also beaten analyst estimates for revenue, adjusted net income, and adjusted earnings per share for the past four consecutive quarters. In commenting on these results, Press Ganey Chief Executive Officer Patrick T. Ryan remarked, “We are pleased with our solid performance in the second quarter of 2016… During the quarter, we also made significant progress integrating Avatar International Holding Company, acquired May 2, 2016, into our business operations.”
In light of these facts, Robbins Arroyo LLP is examining Press Ganey’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.
Press Ganey 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. Press Ganey 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.