Sirona Dental Systems, Inc. (NASDAQ:SIRO) and its competitor Dentsply International have agreed to merge into a single multi-billion dollar company. The deal has been valued at $5.51 billion, which would be paid by Dentsply to Sirona Dental for acquiring all of the latter’s stock. However, the deal has also attracted attention from law firms, who are investigating the matter for possible charges of fiduciary.
As per the details of the agreement, SIRO shareholders will be given 1.8142 Dentsply shares for every SIRO share. This, currently, translates to a return of $95.80 per share for the shareholders. However, the returns are significantly much less than the SIRO target price of $103 and a 52-week high of $120. Consequently, the board of directors is under fire for failing to maximize the value of the company and taking the stockholders opinion into consideration.
However, if the litigation fails to achieve its goals and the deal goes ahead as planned, the resulting company would be the largest manufacturer of dental equipment. The combined revenues of the two companies, for the preceding year, were $3.8 billion. Additionally, the two companies had their combined equity valued at $13.3 billion. The deal also states that 58% ownership of the new company would be held by shareholders from Dentsply, while the remaining 42% would be given to the shareholders of SIRO.
The execution of the deal is planned to begin in the 1Q2016, with the CEO of Sirona Jeffrey Slovin becoming the CEO of the new company. The CEO of Dentsply, Bret Wise, would be made the executive chairman. The new company would be named Dentsply Sirona and would be assigned XRAY as its ticker symbol for trading on the NASDAQ exchange. Furthermore, the HQ of Dentsply would be the HQ for the new company, with an additional international HQ in Salzburg Austria.
Sirona Dental Systems, Inc. (NASDAQ:SIRO) experienced a trade volume of 0.00 during the September 16 session, resulting in a decline of 2.36% in share value. The stock stood at $96.97, at the final bell.
