Back in February, my colleague David Englander noted that a potential buyout was one reason to buy shares of Rochester Medical (ROCM). Today, Rochester agreed to be purchased by CR Bard (BCR) for $262 million.
Getty Images Reuters has the details:
Bard will pay $20 per Rochester Medical share, representing a hefty 45 percent premium to the stock’s last close. Rochester Medical shares were up 44 percent in premarket trading on Wednesday.
Rochester Medical’s products such as disposable medical catheters are used by patients who need help with urinary retention and incontinence outside the hospital.
Matt Weight, an analyst at Feltl and Company, explains why the deal makes sense:
Most notably we believe ROCM maintains industry leading technology, specifically within its intermittent catheter business however ROCM maintains a subscale sales force, in our opinion. This merger likely will allow a substantial increase in sales efforts for ROCM leading intermittent and MEC businesses that could ultimately accelerate ROCM market share gains…
Bard’s shares have gained 1.7% to $116.62 today, while Rochester has jumped 44% to $19.90. Investors who bought the company after David’s article was published-which excludes the 19% gain the day it was published–made 41% on the trade.
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