Featured Company News – Sevcon to be Acquired by BorgWarner

LONDON, UK / ACCESSWIRE / July 19, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Sevcon, Inc. (NASDAQ: SEV), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=SEV. The Company announced on July 17, 2017, that it has entered into a definitive merger agreement pursuant to which, BorgWarner Inc. (NYSE: BWA) will acquire all the outstanding shares of the common stock for $22.00 per share in cash. Also, BorgWarner will pay for all the outstanding shares of Sevcon’s Series A Convertible Preferred Stock for a price per share of on an as-converted basis equal to the common stock. The net transaction value stands at about $200 million at the closing of the agreement. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

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The Announcement

Sevcon states that it is the world leader in the design and manufacture of controls and battery chargers for electric and hybrid vehicles which have zero emission. According to CEO Matt Boyle, Sevcon, the proposed merger offer substantial value to the Company stockholders and the chance for the Company to maximize previous growth investments and capitalize on greater opportunities.

BorgWarner offers Sevcon the feasibility to excel as a part of a much larger organization and with significant market presence. BorgWarner is a product leader in technology solutions for combustion, hybrid and electric vehicles. The Company operates facilities across 62 locations in 17 countries, where it employs over a 27,000-strong workforce.

The transaction price of $22 per share represents a 61% premium to the Company’s closing price on July 14, 2017. The Company’s Board of Directors unanimously approved the merger agreement and recommended the approval of the merger by Sevcon’s stockholders. The transaction is expected to close in Q4 2017 and is subject to satisfaction or waiver of certain other closing conditions. The transaction, according to the Company is not subject to financing conditions.

Company Growth Prospects

Sevcon recently agreed to acquire Xuchang Fuhua Glass Co. Ltd’s entire 50% equity interest in Sevcon Energy Technology Co. Ltd, for a purchase price of $5 million, on June 08, 2017. The Company already held a 50% equity interest in Sevcon Energy Technology and post the transaction became a wholly-owned foreign entity, under Chinese law. Sevcon viewed the Chinese automobile market as the future leading market for two-and four-wheel electric wheels and found it accretive to its growth by securing the full future profit stream and further capitalizing on the existing opportunities.

Financial Recap

Sevcon recently reported its Q2 FY17 results on June 15, 2017, where it reported net revenues of $15.67 million for the three month period ended March 31, 2017. The Company reported a net loss of $2.19 million in Q2 FY17 against $2.43 million for Q1 FY17, where the Company attributed the decline in earnings to narrowing operating margins. Sevcon reported a Y-O-Y decline in operating cash flow of 20.06%, while the gross margins narrowed from 31.27% to 24.04% compared to the same period last year. Sevcon offers customers solutions through its operations in the US, UK, France, Germany, Italy, China and Asia/Pacific region, as well as through an international dealer network.

Last Close Stock Review

At the closing bell, on Tuesday, July 18, 2017, Sevcon’s stock slightly climbed 0.09%, ending the trading session at $21.75. A total volume of 44.32 thousand shares has exchanged hands, which was higher than the 3-month average volume of 24.51 thousand shares. The Company’s stock price skyrocketed 64.15% in the last three months, 163.64% in the past six months, and 126.09% in the previous twelve months. Moreover, the stock soared 154.70% since the start of the year. The stock currently has a market cap of $123.98 million.

On Tuesday, July 18, 2017, the stock closed the trading session at $46.19, marginally dropping 0.06% from its previous closing price of $46.22. A total volume of 1.25 million shares has exchanged hands. BorgWarner’s stock price soared 18.89% in the last three months, 16.08% in the past six months, and 43.58% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 17.11%. The stock is trading at a PE ratio of 70.74 and has a dividend yield of 1.21%. At Tuesday’s closing price, the stock’s net capitalization stands at $9.79 billion.

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