NextPlat (NASDAQ:NXPL) stock is up on Friday after the mobile satellite services company proposed a merger with its majority-owned subsidiary Progressive Care (OTCMKTS:RXMD).
NextPlat will use a wholly-owned subsidiary to combine with Progressive Care, which will result in it surviving the merger but switching to the Progressive Care name. The deal will see RXMD shareholders issued new shares of NXPL stock. The ratio values RXMD at $2.20 each.
NextPlat executive chairman and CEO Charles Fernandez said the following about the merger plan:
“As a result of this business combination, we expect to quickly realize an array of valuable synergies from additional top-line growth to improved bottom-line profitability. These benefits include the ability to expand Progressive Care’s consumer offerings with new OTC products such as our soon-to-be-launched Florida Sunshine brand of premium-grade vitamins and dietary supplements, and significant combined annual cost reductions resulting from the elimination of complexities and redundant public company legal and accounting expenses.”
Details of the NXPL Stock Merger
Investors will note that the support has the approval from both companies’ Boards of Directors. It’s also worth mentioning that NextPlat executives and Board members own a combined 53% stake in Progressive Care.
NextPlat now just needs approval from regulators to move forward with its combination with Progressive Care. This has it expecting the merger to close in the third quarter of 2024.
NXPL stock is up 33.8% on Friday, with more than 35 million shares traded. That’s well above its daily average trading volume of about 12,700 shares.
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On the date of publication, William White did not have (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.
