Robbins Arroyo LLP: Acquisition of Everyday Health, Inc. (EVDY) by j2 Global, Inc.’s (JCOM) Ziff Davis, LLC May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Everyday Health, Inc. (NYSE: EVDY) by Ziff Davis, LLC, which comprises the Digital Media Division of j2 Global, Inc. (NASDAQGS: JCOM). On October 21, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which Ziff Davis will acquire Everyday Health. Under the terms of the agreement, Everyday Health shareholders will receive $10.50 in cash for each share of Everyday Health common stock.
Is the Proposed Acquisition Best for Everyday Health and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Everyday Health is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $10.50 merger consideration represents a premium of only 11.7% based on Everyday Health’s closing price on October 20, 2016. This premium is significantly below the average one day premium of nearly 54.4% for comparable transactions within the past year. Further, the $10.50 merger consideration is significantly below the target price of $17.00 set by an analyst at Credit Suisse on July 15, 2016, the target price of $13.00 set by an analyst at Leerink Partners LLC on June 24, 2016, and the target price of $12.00 set by an analyst at SunTrust Robinson Humphrey on October 13, 2016. In the last three years, Everyday Health traded as high as $19.89 on June 23, 2014, and most recently traded above the merger consideration – at $10.56 – on November 9, 2015.
On August 4, 2016, Everyday Health reported strong earnings results for its second quarter 2016. Total revenue was $57.7 million, a 5% year-over-year increase for the second quarter and an $18% year-over-year increase for the first half of 2016. Everyday Health beat consensus analyst expectations for Adjusted Net Income, Revenue, and Adjusted EPS in three out of the last four quarters. In commenting on these results, Everyday Health Co-Founder and Chief Executive Officer Ben Wolin remarked, “We delivered strong second quarter and first half 2016 results, which demonstrate that the strategic investments we have made are paying off. We are pleased to see our consumer advertising growing again, and we are very excited about the solid growth and revenue opportunity across our professional and payer/provider businesses.”
In light of these facts, Robbins Arroyo LLP is examining Everyday Health’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.
Everyday Health 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.
Everyday Health 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.
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