Pet medications wholesaler PetIQ agreed to a $1.5 billion buyout Wednesday, sending shares into the stratosphere.
Consumer-focused private investment firm Bansk Group will pay $31 per share of PetIQ stock in an all-cash transaction expected to close in the fourth quarter. PetIQ's board has already agreed to the deal, which values shares at a 41% premium to their 30-day volume-weighted average price.
Cord Christensen, founder, chairman and chief executive of PetIQ, called the deal "an attractive outcome for PetIQ and our stockholders."
"Our growth and success over the last 14 years is a testament to our emphasis on long-term, strategic decision making, while operating our business in the interest of all stakeholders," he said in a written statement.
In morning trades, PetIQ stock skyrocketed 48% to 30.45. Shares hit a three-year high, breaking out of a flat base with a buy point at 22.91, and quickly topped a profit-taking zone, MarketSurge shows.
PetIQ Misses Sales Views, But Earnings Beat
PetIQ focuses on the retail and e-commerce sales channels to distribute pet medications, as well as health and wellness items.
In the second quarter — also reported Wednesday — total sales climbed almost 5% to $328.9 million. That was in line with PetIQ's guidance for $325 million to $335 million in sales, but missed forecasts for $330.1 million, according to FactSet. Adjusted earnings trounced forecasts, however, at 70 cents a share vs. analysts' call for 50 cents.
The best growth came from PetIQ's manufactured products. Sales grew nearly 16% and outperformed the company's expectations for the quarter.
Prior to the takeover announcement, PetIQ stock had risen more than 54% this year. Shares have an IBD Digital Relative Strength Rating of 85, putting their 12-month performance in the leading 15% of all stocks regardless of industry group.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
