Shares of Santa Ana-based MSC.Software Corp. soared after the maker of simulation software for manufacturers, aerospace and defense contractors said it was being acquired by Palo Alto-based private equity firm Symphony Technology Group LLC for about $360 million in cash.
MSC’s shares surged closer to Symphony’s buyout price as investors sent the stock up 11% at close of trading on a recent market value of about $340 million.
Under the terms of the deal, MSC stockholders are set to get $7.63 per share, 13% more than where the stock was trading at before the deal.
Activist investor Elliott Management Corp., a unit of New York hedge fund Elliott Associates LP, played a role in the deal.
The companies didn’t say how much of a stake Elliot has but said it’s now the majority shareholder of MSC.
Elliott is set to provide some debt and private equity financing to help fund the deal.
The deal is set to close by the end of the third quarter, the company said.
MSC.Software had been on a rocky road for some time.
Before Wednesday’s run-up, its shares were off more than 40% in the past year.
Last year, Elliott recommended that the company “explore strategic alternatives,” including a possible sale.
“This decision is the culmination of a long process of review and examination, and in addition to maximizing value for our stockholders, provides excellent opportunities for our employees and customers,” interim Chief Executive Ashfaq Munshi said.
Earlier this year, the company named Munshi temporary chief executive after former chairman and chief executive Bill Weyand and former chief operating officer Glenn Weinkoop stepped down.
At the same time, MSC did some reshuffling on the board.
The recent executive moves are MSC’s second shakeup in the past five years.
In 2005, Weyand replaced Frank Perna as chief executive. Sam Aureimma replaced John Laskey as chief financial officer.
Laskey was hired in 2004 to replace Louis Greco, who stepped down amid a Securities and Exchange Commission investigation into delayed and restated financial results.
Weyand oversaw job cuts and sales of some of MSC’s unprofitable businesses.
A few years ago MSC was kicked off of the New York Stock Exchange and traded on the Pink Sheets for a while. It got its house in order under Weyand and returned to trading on Nasdaq in 2006.
MSC’s software enables manufacturers to simulate different stress, vibration and heat conditions to predict how designs of products will behave in the real world. The software avoids having to build and test expensive prototypes.
Its customers are a laundry list of big companies, including Ford Motor Co., General Motors Corp., Lockheed Martin Corp., PSA Peugeot Citro & #235;n SA, United Technologies Corp. and Caterpillar Inc.
The company was founded by Richard MacNeal and Robert Schwendler with an initial investment of $18,000 in 1963.
