Thursday, March 12, 2009

Axsys Technologies (AXYS) Confirms It Has Put Itself Up for Trade

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Yesterday mid day there had been reports that Axsys Technologies (AXYS) had put itself up for sale - normally I don't buy rumors, but the fact a first round of an auction had reportedly taken place made me believe this one has some legs to it. [Mar 11: Bookkeeping - Starting Axsys Technologies as Company Puts Itself Up for Sale] Another reason I was willing to purchase this company is we had some some individual stocks and it has been increasingly difficult to find long ideas that can sustain any sort of upward movement over any length of time. If the "for sale" idea was true, at least there would be an underlying bid under the company to protect the valuation. But of course there is always a risk as with any purchase in the market. The stock is trading nicely in the $37s-$38s this morning. I am not looking so much for "fast money" as something stable I can actually hold on the long side....

Yesterday after the close of the market, the company confirmed indeed it had put itself up for sale
  • In response to press reports, Axsys Technologies, Inc. (NasdaqGS:AXYS - News), a global leader in the design and development of high-performance surveillance cameras, imaging systems and related motion control technologies, today announced that it is evaluating the possible sale of the company.
  • Notwithstanding strong historical and projected revenue and earnings growth, downward pressure on Axsys' publicly traded stock in recent months has led to an increasing number of overtures from interested strategic buyers. In order to evaluate the level of interest in a structured manner, management has engaged the investment banking firm, Jefferies & Company, Inc., to conduct a formal process.
  • The company's enviable balance sheet, growth prospects, and market presence, which make Axsys an attractive acquisition candidate, also position Axsys as an effective stand-alone company. As a consequence, while Axsys' board of directors feels that it is appropriate to evaluate offers for the company, it is under no obligation to accept an offer that it does not believe is in the best interest of its shareholders. There can be no assurance made that a transaction will be consummated, if at all, on terms acceptable to Axsys and its shareholders.
Once more - the lower stock prices go the more we should see acquisitions. The lack of credit worldwide has been the issue thus far, but companies with cash or very good balance sheets should begin to make overtures as many solid small and mid cap companies have been destroyed in the "baby with the bathwater" selling that is relentless. As long as the world does not end as the Mayan calendar says in 2012, these should be some excellent bargains to be had - the difference between purchases now versus in the mid 2000s is that they will be done increasingly by companies instead of by fast money financiers looking for a quick buck (and flip) using easy Uncle Alan Greenspan money.

A quick analyst blurb
  • Surveillance camera maker Axsys Technologies Inc., which is exploring a sale of company, "could attract interest from one of the major U.S. defense contractors," Morgan Keegan analyst Brian W. Ruttenbur said Thursday.
  • The major defense contractors, he noted, all have significant cash positions, and what he believes is a desire to gain greater exposure to niches of the defense market that "should continue to see solid growth over the next several years."
  • The analyst, who rates Axsys "Outperform," said whether or not there is a deal he is optimistic about the company's prospects. Its shares, he added, are attractively valued.
Long Axsys Technologies in fund and personal account


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