Aegion Receives Higher Buyout Offer From New Mountain Capital

Aegion Corp. has received a higher buyout offer from investment firm, New Mountain Capital.

Per the revised offer, New Mountain has agreed to pay $27 per share in cash to the shareholders of Aegion (AEGN), which is higher than an earlier buyout bid of $26 per share announced last month. The revised offer values the company at $995 million, including net debt.

Aegion’s board has approved the revised New Mountain offer and expects to close the deal in the second quarter of 2021. Furthermore, Aegion will become a private company after the deal is completed. (See Aegion stock analysis on TipRanks)

However, if the deal fails, Aegion would have to pay a break-up fee of $40 million, while the termination fee would be $70 million if New Mountain breaks the deal.

Notably, on Friday, Aegion was also offered an unsolicited acquisition proposal from a third party for an undisclosed amount.

On Feb. 17, Maxim Group analyst Tate Sullivan maintained a Hold rating on the stock. In a note to investors, the analyst said, “the sale will help AEGN continue to develop robotic sealing technology for smaller diameter drinking water pipes, ultraviolet light curing services, and possibly pipeline integrity inspection products.”

Sullivan believes that, “New Mountain may consider selling some of AEGN’s products through some of New Mountain’s infrastructure portfolio companies, including Inframark, Pearce Services, and TRC Companies.”

The consensus rating on the stock is a Hold. That’s based on 3 unanimous Hold recommendations. Looking ahead, the average analyst price target stands at $26, putting the downside potential at about 8.8% over the next 12 months. Shares have gained over 83% so far this year.

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