Robbins LLP: Acquisition of Cascade Microtech Inc. (CSCD) by FormFactor Inc. (FORM) May Not Be in Shareholders’ Best Interests
Robbins LLP are investigating the proposed acquisition of Cascade Microtech Inc. (NASDAQ: CSCD) by FormFactor Inc. (NASDAQ: FORM). On February 4, 2016, the two companies announced the signing of a definitive merger agreement pursuant to which FormFactor will acquire Cascade. Under the terms of the agreement, Cascade shareholders will receive $16.00 in cash and 0.6534 shares of FormFactor for each share of Cascade common stock they own, the value of which is equivalent to $21.13 per share of Cascade.
Is the Proposed Acquisition Best for Cascade and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Cascade is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $21.13 merger consideration represents a premium of 39.1% based on Cascade’s one-month average closing price. This premium is significantly below the average one-month premium of nearly 57.4% for comparable transactions within the past five years.
On February 4, 2016, Cascade reported strong earnings results for its fourth quarter 2015. Total revenue for the quarter was $40.4 million, an increase of 10.4% compared to the same period last year. Income from Operations for the quarter was $6.5 million, an increase of 58% compared to the same period last year. Additionally, Cascade has beat consensus analyst estimates for adjusted EPS and adjusted net income in every quarter for the past two years. In commenting on these results, Cascade President and Chief Executive Officer Michael Burger remarked, “On an annual basis, records were set for probes segment revenue, overall revenue, gross margins, income from operations, adjusted EBITDAS and non-GAAP EPS. With a very strong close to 2015 together with record backlog, we expect to financially outperform our 2015 results and grow faster than the markets we serve in 2016.”
In light of these facts, Robbins LLP is examining Cascade’s Board of Directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Cascade shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Cascade shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.