World Energy Solutions Inc
Acquisition of World Energy Solutions, Inc. (XWES) by EnerNOC, Inc. (ENOC) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of World Energy Solutions, Inc. (NASDAQ: XWES) by EnerNOC, Inc. (NASDAQ: ENOC). On November 4, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which EnerNOC will acquire World Energy. Under the terms of the agreement, World Energy shareholders will receive $5.50 in cash for each share of World Energy common stock.
Is the Proposed Acquisition Best for World Energy and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at World Energy is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $5.50 merger consideration represents a premium of 33.2% based on World Energy’s closing price on November 4, 2014. This premium is significantly below the average one-day premium of nearly 60% for comparable transactions within the past three years. Further, the $5.50 merger consideration is significantly below the target price of $7.00 set by an analyst at Roth Capital Partners on August 11, 2014.
On August 8, 2014, World Energy released its earnings results for its second quarter 2014, reporting strong quarterly earnings. In particular, World Energy reported record EBITDA of $1.3 million. Further, the company reported revenue of $9.4 million, an 18% increase compared to the same quarter 2013, and it improved its gross margin to 77% compared to 73% in the same period the previous year. In commenting on these results, World Energy’s CEO, Phil Adams, remarked, “Not only did we show double-digit organic revenue growth, but we achieved record EBITDA and reached quarterly profitability more quickly than expected…. Based on our results through the first half of the year, a strong sales pipeline, and continued improvement in sales and operational performance, we are again raising our view on EBITDA growth. We now forecast we will double last year’s EBITDA and reach GAPP profitability for the full year.”
In light of these facts, Robbins Arroyo LLP is examining World Energy 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.
World Energy 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.
World Energy 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.