Why Internet Company Bsquare's Shares Are Rising Thursday

Bsquare Corporation BSQR shares are trading higher after the company said IOT Technology firm Kontron America will acquire the company for $1.90 per BSQR share. 

The deal will be an all-cash transaction, representing an implied equity value of approximately $38 million.

The offer price represents a 62% premium to the trailing 52-week volume-weighted average of Bsquare's closing stock prices as of October 10, 2023, and a premium of 53% to the October 11, 2023 closing price.

Ralph C. Derrickson, Bsquare's President and CEO added: "Bsquare's business will combine naturally with Kontron's IoT hardware products and services to create a more complete solution for our customers. The acquisition provides liquidity for Bsquare shareholders while providing scale and efficiency for the business."

Bsquare's results were relatively dull in Q2, where total revenue fell 20% compared to Q1. Loss from operations for the quarter was $(0.7) million. 

In connection with the execution of the merger agreement, certain of Bsquare's shareholders, as well as each director and executive officer, holding approximately 17% in the aggregate of Bsquare's outstanding shares, agreed to tender all of their Bsquare shares in the tender offer. 

Upon successful culmination of the tender offer, Kontron intends to acquire any untendered shares of Bsquare's common stock through a subsequent merger, executed for the same per common share consideration.

As of the end of June 30, 2023, BSQR's vash, cash equivalents, restricted cash, and short-term investments totaled $33.4 million. 

After closing, Bsquare will become a privately held company, and shares of Bsquare common stock will no longer be listed on any public market. The transaction is expected to close later in 2023.

Price Action: BSQR shares are trading higher by 47.58% to $1.83 premarket on the last check Thursday.