En Pointe Technologies, Inc (NASDAQ: ENPT)

April 28, 2009 · 4 Comments

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We are adding En Pointe technologies, Inc. to our ValueHuntr Portfolio. On March 1, 2009, the company agreed to be acquired for $2.50/share in cash. This represents a potential 13% absolute return relative to the company’s current price of $2.22/share if the merger is materialized, which we expect it will.

 

About

 

En Pointe Technologies, Inc., through its subsidiaries, provides information technology hardware and software products and services in the United States. The company offers a range of hardware and software products, such as desktop and laptop computers, servers, monitors, memory, peripherals and accessories, operating systems, application software, and consumables and supplies. It serves large and medium sized companies, and government entities. The company was founded in 1993 and is headquartered in Gardena, California.

 

Catalyst

 

ENPT’s Board of Directors, acting upon the unanimous recommendation of a special committee comprised entirely of independent directors, has approved the merger agreement and resolved to recommend that the Company’s stockholders vote in favor of the agreement. Pursuant to the terms of the merger agreement, the Acquiror has agreed to pay to the Company’s stockholders $2.50 in cash for each outstanding share of the Company’s common stock. The merger agreement contains customary representations, warranties and covenants made by the Company, including covenants that the Company will run its business in the ordinary course of business consistent with past practice and will refrain from taking certain actions between the date of the merger agreement and the date of closing of the merger.

Conclusion

We are adding En Pointe technologies, Inc. to our ValueHuntr Portfolio because we believe the probability that the merger will consummate before the end of Q3 is fairly high. Therefore, we see this investment as one which can provide us with a quick 13% absolute return with little to no risk.

 

The proxy statement submitted by ENPT regarding the special shareholder meeting prior to merger approval can be found here.

 

 

Disclosure: We currently have a position in ENPT

Categories: Arbitrage · Special Situations · Value Investing
Tagged: Arbitrage, En Pointe Technologies, ENPT, Merger, Special Situations

4 responses so far ↓

  • L // April 28, 2009 at 2:58 pm | Reply

    I noticed the following in the preliminary proxy:

    “The GE Capital commitment letter expires by its terms on April 30, 2009, and GE Capital has no affirmative obligation under the commitment letter to grant Parent or Merger Sub any extension of the commitment letter. ”

    Has this date been extended?

    • ValueHuntr // April 28, 2009 at 3:49 pm | Reply

      The date has not been extended, but management has been looking for better opportunities as the date approaches. We are fairly confident the commitment letter has been drafted and will be submitted shortly if the board does not find better third party offers. We think July 31, 2009 is as far as merger approval can be extended, but we expect it to be completed before the end of June.

  • widemoat // April 29, 2009 at 10:04 pm | Reply

    What do you see as the downside price if the sale doesn’t complete? The 52 week low is below $1. That’s really the barrier for me; I need better than 95% odds of completion for it to justify the risk. Thoughts?

  • FM // July 9, 2009 at 5:43 pm | Reply

    Latest proxy statement said financing was only available until June 30, 2009 but 10-Q says they would hope to have the deal done by July 31, 2009. Any news on an extension? I can’t get through to the CEO: (310) 337-5250.

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