Shares of Spark Power soared after the Canadian electrical services company announced its acquisition by private-equity firm American Pacific Group (APG) in a deal valued at approximately C$140 million, including debt.
Share Price Rally
In morning trading, Spark Power’s shares surged by 61% to reach C$0.79, marking a 66% increase since the beginning of the year.
APG’s Offer
APG, based in the San Francisco Bay Area, will pay C$0.825 per share in cash, representing a substantial 68% premium over Thursday’s closing price prior to the announcement of the agreement.
Co-founders and Directors in Agreement
As part of the deal, Spark Power’s co-founders Jason Sparaga, Andrew Clark, and Eric Waxman, along with other directors and executive officers holding a combined 43% stake, have committed to voting their shares in favor of the takeover.
Financial Challenges
Spark Power reported lower-than-expected revenue for the first two months of the third quarter, experiencing a decline compared to the same period last year. The company anticipates breaching its financial covenants for the latest quarter due to slower volume growth and gross margin enhancements. Discussions are underway with the lender to obtain a waiver for the expected covenant violation.
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