Robbins LLP: Acquisition of Sirona Dental Systems Inc. (SIRO) by DENTSPLY International Inc. (XRAY) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Sirona Dental Systems Inc. (NASDAQ: SIRO) by DENTSPLY International Inc. (NASDAQ: XRAY). On September 15, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which DENTSPLY will acquire Sirona Dental. Under the terms of the agreement, Sirona Dental shareholders will receive 1.8142 shares of DENTSPLY for each share of Sirona Dental they own, the value of which is equivalent to $98.59 per share of Sirona Dental.
Is the Proposed Acquisition Best for Sirona Dental and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Sirona Dental is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $98.59 merger consideration represents a premium of only 1.7% based on Sirona Dental’s one-month average closing price. This premium is significantly below the one-month average premium of nearly 36.8% for comparable transactions within the past five years. Further, the $98.59 merger consideration is significantly below the target price of eight analysts ranging from $120.00 set by an analyst at Northcoast Research on May 29, 2015, to $100.00 set by an analyst at JP Morgan on August 7, 2015. In the last three years, Sirona Dental traded as high as $105.37 on July 31, 2015, and most recently traded above the merger consideration – at $98.62 – on September 14, 2015.
On August 7, 2015, Sirona Dental reported strong earnings results for its third quarter 2015. Revenue was a record $306.1 million for the quarter, an increase of 2.1% compared to the third quarter of 2014. Net income for the quarter was $58.8 million, an increase of 14% compared to the third quarter of 2014. Additionally, Sirona Dental has beat consensus analyst estimates for adjusted EPS and adjusted net income in every quarter for the past two years, and has beat consensus analyst estimates for sales in three out of its past four quarters. In commenting on these results, Sirona Dental President and Chief Executive Officer Jeffrey T. Slovin remarked, “We had an outstanding third quarter with record revenues and 15.2% local currency growth. Europe was the strongest growing region with remarkable growth in Germany propelled by record sales from the International Dental Show. Rest of world growth was robust, despite continuing challenges from Russia, Brazil and China.”
In light of these facts, Robbins LLP is examining Sirona Dental’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.
Sirona Dental 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.
Sirona Dental 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.