One-time meme stock Weber (NYSE:WEBR) is trending on social media and soaring 23% to $8.02 after the barbecue grill maker agreed to be acquired by investment bank BDT Capital Partners. Under the deal, Weber will become a privately traded company.
WEBR Stock and the Details of the Acquisition
BDT’s funds will buy all of the Weber stock that they don’t already control for $8.05 per share, representing an enterprise value of $3.7 billion. WEBR stock closed at $6.50 per share on Friday. The $8.05 per share acquisition price is 60% above the final price of WEBR stock on Oct. 24.
On Oct. 25, Weber disclosed that it had obtained “a non-binding proposal from BDT Capital” to be acquired by the investment fund for $6.25 per share.
Weber anticipates that the takeover, which was approved by a special committee of the company’s board, will be finalized by June 2023.
More About Weber and BDT
Weber sells many types of barbecue grills, including those powered by gas, charcoal, wood pellets, and electricity. Founded in 1952, the Illinois-based company generated $1.98 billion in revenue and $71.8 million of operating income in its fiscal year that ended in Sept. 2021.
Weber, which obtained $250 million from its initial public offering (IPO) in August 2021, briefly became a meme stock in August 2022 after retail investors noticed that the stock’s short interest had reached 67%. Before today, WEBR stock had tumbled 50% in 2022.
BDT Capital Partners is owned by BDT & Company, which was created in 2009. BDT & Company describes itself as “a merchant bank that provides advice and long-term capital through its affiliated funds.”
Implications of the Deal
The shares of Traeger (NYSE:COOK), a competing grill maker, are advancing 10% on news of Weber’s acquisition.
BDT’s acquisition of Weber could indicate that it’s somewhat bullish on the medium-term and long-term outlook of the American stock markets. That’s because, if BDT was pessimistic about the markets, it likely would have waited for stock valuations to drop further before pulling the trigger on the deal.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.