Photon Control Inc

Photon Control Inc (TSX: PHO) is a Canada-based company. The Company designs, manufactures and distributes a wide range of optical sensors and systems to measure temperature and position.

Why Investors Should Book Profit?

• Acquisition of Photon Control by MKS Instruments, offering a decent premium to the existing shareholders.
• PHO closed the May 10, 2021 trading session at CAD 3.63, which is more or less at par with the all-cash per-share value of CAD 3.60 per share offered by MKS.
• The stock would be delisted once the transaction is complete.

Acquisition Highlights

• Photon Control shareholders to receive CAD 3.60 per share in cash, representing an aggregate transaction value of approximately CAD 387 million.
• The purchase price represents a premium of 26% to the 30-day volume-weighted price of CAD 2.87 per Photon Control common share.
• Photon Control’s Board of Directors and its Special Committee of independent members of the Board unanimously recommend that Photon Control security holders vote in favor of the transaction.
• The transaction is subject to customary closing conditions, including approval by Photon Control security holders and court approval.
• The transaction is expected to close in the third quarter of 2021.

Stock Recommendation

The stock made a decent rally in the past one year. The stock gained ~17% on May 10, 2021, post the acquisition broke out. The company entered into an agreement where MKS Instruments would be offering CAD 3.6 per share in cash to the existing shareholders of PHO. The stock traded at CAD 3.63 at the end of the May 10, 2021 trading session. The closing price is at par with the cash price offered by MKS. Hence, we suggest the investors take out the profit from PHO stock as it is an all-cash deal, and the stock would be delisted from the exchange. Therefore, we recommend a “Sell” rating on the stock at the last closing price of CAD 3.63 on May 10, 2021.  

Technical Price Chart (as on May 10, 2021). Source: Refinitiv (Thomson Reuters)

Disclaimer

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