Robbins LLP: Acquisition of Liberator Medical Holdings Inc. (LBMH) by C.R. Bard Inc. (BCR) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Liberator Medical Holdings Inc. (NYSE MKT: LBMH) by C.R. Bard Inc. (NYSE: BCR). On November 20, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which C.R. Bard will acquire Liberator Medical. Under the terms of the agreement, Liberator Medical shareholders will receive $3.35 in cash for each share of Liberator Medical common stock.
Is the Proposed Acquisition Best for Liberator Medical and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Liberator Medical is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $3.35 merger consideration represents a premium of only 25.9% based on Liberator Medical’s closing price on November 19, 2015. This premium is significantly below the average one-day premium of nearly 47% for comparable transactions within the past five years. Further, the $3.35 merger consideration is significantly below the target price of $8.00 set by an analyst at Dawson James Securities on January 6, 2014. In the last three years, Liberator Medical traded as high as $6.00 on January 21, 2014, and most recently traded above the merger consideration – at $3.36 – on April 29, 2015.
On August 10, 2015, Liberator Medical reported strong earnings results for its third quarter 2015. Net sales for the quarter were $20.4 million, an increase of 9.7% compared to the same period last year. Gross profit for the period was $12.5 million, an increase of 6% compared to the same period last year. In commenting on these results, Liberator Medical President and Chief Executive Officer Mark Libratore remarked, “I am pleased to report 9.9% year-over-year revenue growth for the nine months ended June 30, 2015. Our efforts to improve the customer experience have delivered just under 15% revenue retention for the three months, and 13% for the nine months ended June 30th. Creating value for our customers is an essential step in continuing to grow the value of Liberator. I am not pleased with the drop in net income year-over-year. In the absence of one-time expenses our net income would have grown. We are very focused on reducing extraordinary expenses and protecting shareholder value. We will continue creating efficiencies, improving profitability and strengthening our quality and compliance systems as we head into our fiscal fourth quarter.”
In light of these facts, Robbins LLP is examining Liberator Medical’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.
Liberator Medical 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.
Liberator Medical 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.