Shares of Radiant Systems, Inc. (Nasdaq: RADS) soared more than 30% to a last decade record of $28 today, shortly after NCR Corp.n (NYSE: NCR) offered to purchase RADS for $1.2 billion in cash. Both companies make cash registers, automated teller and point-of-sale machines, as well as other transaction systems and associated software applications, with Radiant having a strong position in the hospitality and specialty-retail markets.NCR scheduled a cash tender offer of $28 for every share of Radiant that will start on July 25 and will be open for a period of at least 20 business days. At that price, the tender offer represents a 30.5% premium over the company’s stock closing price of $21.45 on Monday. The deal is expected to close in the third quarter, pending regulatory approval.
Radiant is a global provider of innovative technology and services to the hospitality and retail industries. With more than 100,000 installations worldwide, the company’s customers include leading brands and venues in the restaurant and food service, sports and entertainment, petroleum and convenience, and specialty retail markets. The company has delivered 15% compounded annual revenue growth over the last five years, along with significant margin expansion due to strong demand for its software offerings.
Radiant gained nearly 25% over the last three months after first-quarter results topped analyst estimates and the company revisited upward the outlook for 2011. Revenue for Q1 2011 increased 10% to $87.1 million, meeting analyst expectations. Expanding margins brought a 64% surge in adjusted earnings from $5.8 million or $0.17 per share in Q1 2010 to $9.5 million or $0.23 per share in Q1 2011. Analysts polled by Thompson Reuters expected Radiant to earn $0.20 per share.
Strong business momentum and increased visibility inspired management to raise full-year guidance for both revenue and earnings. The company now expects revenue to range from $375 million to $385 million in 2011, up from previous range of $370 million to $380 million. Adjusted earnings are expected to range from $0.97-$1.01 per share, up from previous expectations of $0.95-$0.98 per share. Analysts expect RADS to earn $1.02 a share on revenue of $385 million.
NCR plans to turn Radiant into a new business division that would focus hospitality and specialty retail segments. NCR reported it plans to take advantage of Radiant established position in quick-service and table-service restaurants, specialty and convenience retailers and entertainment venues by combining the offerings of both. Several executives from Radiant will remain on board and will be led by the company’s chief operating officer Andrew Heyman.
The margins improvement in the first quarter of 2011 has popped Radiant during this year; however the company has additional internal reserves to further enhance margins and improve profitability. In addition, the accelerated growth positions the company well to leverage operating expenses and, consequently, provide additional gains to its shareholders.
NCR’s global footprint, brand recognition and track record of innovation combined with Radiant hospitality and retail markets footprint as well as outstanding customer support enable the combined company to accelerate the growth and generate margin expansion and earnings appreciation. The takeover offer recognizes Radiant potential and the 30% premium to current valuation would most likely convince the company’s shareholders to support the transaction and accept the offered premium.
· This newsletter has been helping traders make a killing on RADS. Click here for a 25% discount offer.
· See today’s top stock picks and market analysis
· Need fast service and cheap rates from a broker? Buy stock online at my favorite brokerage
· Want more? Check out the message board buzz for RADS
· See what newsletters are recommending this stock pick
· Get breaking news alerts on these stocks: http://thestockmarketwatch.com/
Microstockprofit.com is committed to producing the highest-quality insight and analysis of small cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or penny stock market, which has traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.
This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Microstockprofit.com is a wholly owned subsidiary of BlueWave Advisors.
While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.