“Gem” From the Manufacturing Sector Posts Nice Gains
Stocks are rallying today, posting a decent recovery from a two-day selloff. Major indexes started off the day up sharply and have since been paring back those gains. While the dollar continues to fall, strong earnings lead US equities back into the green.
Our Top Performer today is a long play from the manufacturing sector.
PlyGem is a leading North American manufacturer of building products. This morning, their struggling stock took a nice jump after the announcement of plans to be acquired and merged with another company. They will no longer be publically traded once the acquisition is fully executed.
Clayton, Dubilier, and Rice (CD&R), a private equity firm, will purchase Ply Gem for $21.64 per share. This price represents a 20% premium on yesterday’s closing price, and investors acted accordingly, buying up the stock in short order. It is sitting up 18% at the time of this writing.
CD&R, which will outlay a total of $2.4 billion for the purchase, plans to merge Ply Gem with Atrium Doors and Windows, which they are also acquiring. The combined entity has the potential to achieve substantial economies of scale and increased market power in the wake of the merger.
The sale marked quite an opportunity for PGEM shareholders (and News Quantified users who jumped to buy after the announcement): the stock hasn’t traded near its acquisition price at any time in the last three years.
Diverse Plays, Great Profits: All in a single news day.
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