Shares of TRC Companies, Inc. (NYSE:TRR) have surged 45% this morning after the company announced that it has entered into a definitive merger agreement with an investment fund managed by New Mountain Capital, LLC. Under the agreement, New Mountain will buy TRC Companies, Inc. (NYSE:TRR) for $17.55 in cash per share, or a 46.8% premium to yesterday’s close. The merger agreement has been unanimously approved by the board, with CEO Chris Vincze saying, ‘This transaction will deliver immediate value to our shareholders while enabling TRC to continue to pursue its long-term growth strategy. We are confident this partnership with New Mountain Capital represents the best path forward for all of TRC’s stakeholders. New Mountain’s culture and values are aligned to our own and I believe their growth-oriented investment approach, extensive industry experience and reputation for integrity differentiate them as the ideal partner for TRC’.
What Does The Smart Money Sentiment Say?
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According to our data, elite fund sentiment was relatively stable going from the third quarter into the fourth. Of the 742 elite funds we track, 6 funds owned $29.17 million of TRC Companies, Inc. (NYSE:TRR) and accounted for 8.80% of the float on December 31, versus 6 funds and $24.77 million respectively on September 30. Chuck Royce‘s Royce & Associates cut its holdings by 6% but still owned 2.154 million shares at the end of December.
The Bottom Line
Traders are buying TRC Companies, Inc. (NYSE:TRR) today due to a take-private agreement that will pay shareholders a nice premium to yesterday’s prices. For those of you interested, check out this article on the largest defense contractors in the world.