Coreco shares surge on its C$72 million sale to Dalsa
FEBRUARY 18--Coreco Inc. (Montreal, Canada) shares skyrocketed 65% after the maker of image-processing technology said it would be purchased for C$72 million ($58.5 million) by Dalsa Corp. (Waterloo, ON, Canada), which makes image sensor equipment. Under a deal supported by both boards, Dalsa will pay Coreco shareholders either 0.5207 of a Dalsa common share, C$10 cash, or a combination of cash and stock.
The C$10 offer represents a 57.5% premium to the 90-day average price of Coreco shares, Dalsa said, adding it will pay a maximum of C$35 million in cash.
Shares in Coreco added C$3.90 to C$9.90 on the Toronto Stock Exchange, while Dalsa stock dipped C$0.40, or 2%, to C$19.21.
"Essentially, Coreco does image acquisition and analysis, while Dalsa provides the cameras," said National Bank Financial analyst Deepak Chopra in a note.
"The deal appears to be a good one for Dalsa, as it is acquiring complementary technologies in the machine vision space and sells into the same customer base."
Coreco makes hardware and software for the computer-vision industry. Its image-processing boards are used by computers to process and analyze images. Dalsa makes image sensor chips and digital cameras.
The transaction, expected to close in late April, will add to earnings in 2005, said Dalsa.
Raymond James analyst Sera Kim said the deal is consistent with Dalsa's acquisition strategy to add complementary technology, enter new markets, and add to earnings within one year.
The deal requires support by two-thirds of Coreco shareholders and regulatory approval.
Coreco chief executive Keith Reuben, board chairman Robert Mee, and founder Daniel Crevier will support the deal with their shares, which represent 11% of the company's stock.
($1=$1.23 Canadian)