Fargo shares soar after takeover bid
Tuesday May 23, 4:06 pm ET Fargo Electronics Inc., is being bought by a Swedish company for about $326 million in cash. Assa Abloy HID Global Corp., will buy Eden Prairie-based Fargo for $25.50 per share cash, a premium of more than 50 percent over its trading price Monday. The acquisition is a result of a long-standing relationship between the two makers of security identification products, according to a company release. News of the deal boosted Fargo's stock price (FRGO) early Tuesday. The stock, which closed Monday at $16.23 per share, was up nearly 53 percent, to $24.80 per share in midday trading. Fargo was founded in 1974. It has about 226 employees and 2005 net income of $10.1 million on revenues of $81.0 million. Assa Abloy, based in Stockholm, had sales of $3.5 billion in 2005 and has 29,000 employees. Its Irvine, Calif.-based HID subsidiary was formed in 1991 as Hughes Identification Devices, a subsidiary of Hughes Aircraft. Assa Abloy bought HID in 2000. The boards of both companies have approved the transactions and Fargo's board has recommended that its shareholders approve the merger. The deal is expected to close in the third quarter of this year. |
