IEC Shares Jump On Creation Tech Acquisition At 48% Premium; Misses On Q3

IEC Electronics Corp IEC reported third-quarter FY21 revenue growth of 4.2% year-on-year to $49.4 million missing the analyst consensus of $53.1 million.
The gross margin contracted 340 bps to 10.6% as costs rose 8.4% Y/Y. The operating margin declined 245 bps to 3.8%, as the SG&A declined 8.7% Y/Y.
EPS of $0.09 missed the analyst consensus of $0.21.
IEC held $0.12 million in cash and equivalents and used $11.1 million in operating cash flow during the nine months ended Jul. 2.
IEC noted increased backlog in Q3 compared to FY20 and a solid book-to-bill ratio of 1.76:1, including a contract extension valued at over $45 million from a longstanding customer.
Acquisition: EMS supplier Creation Technologies Inc inked an agreement to acquire IEC for $15.35 per share in cash, representing a fully diluted equity value of $173.8 million and an aggregate enterprise value of $242.3 million.
The purchase price implies a 47.5% premium to IEC's Aug. 11 closing price of $10.41.
Price Action: IEC shares traded higher by 46.8% at $15.28 on the last check Thursday.