Robbins Arroyo LLP: Acquisition of Ultratech, Inc. (UTEK) by Veeco Instruments Inc. (VECO) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Ultratech, Inc. (NASDAQGS: UTEK) by Veeco Instruments Inc. (NASDAQGS: VECO). On February 2, 2017, the two companies announced the signing of a definitive merger agreement pursuant to which Veeco Instruments will acquire Ultratech. Under the terms of the agreement, Ultratech shareholders will receive $21.75 in cash and 0.2675 shares of Veeco Instruments common stock for each share of Ultratech common stock, the combined value of which is equivalent to $28.64 based on Veeco Instruments’ closing price on February 1, 2017.
Is the Proposed Acquisition Best for Ultratech and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Ultratech is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $28.64 merger consideration represents a premium of only 10.20% based on Ultratech’s one week average closing price for the period ended February 1, 2017. This premium is significantly below the average one week premium of nearly 31.90% for comparable transactions within the past five years. Further, the $28.64 merger consideration is significantly below the target price of $30.00 set by an analyst at Benchmark Company LLC on October 21, 2016.
On February 2, 2017, Ultratech reported strong earnings results for its fourth quarter and fiscal year 2016. Ultratech reported net income of $4.3 million for the three months ended December 31, 2016, a 148% increase from the net loss of $8.9 million reported for the three months ended December 31, 2015. Additionally Ultratech has beaten analyst estimates for adjusted earnings per share for the past four consecutive quarters, and has beaten analyst estimates for revenue and adjusted net income for three of the past four consecutive quarters.
In light of these facts, Robbins Arroyo LLP is examining Ultratech’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.
Ultratech 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.
Ultratech 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.