San Diego-based Omnitracs LLC will acquire Eden Prairie-based XRS Corporation for $178 million, the companies jointly announced on Tuesday. The deal price is based on Omnitracs paying $5.60 per share to acquire XRS, which closed at a price of $3.02 per share last Friday. XRS provides fleet management software for the trucking industry. According to the announcement, the deal is slated to close in the fourth quarter.
But within hours of the deal being announced, several law firms around the country specializing in shareholder actions announced plans to “investigate” the proposed merger. By midday four law firms or legal teams had issued statements announcing plans to dig into the deal, questioning whether the share price of the deal is too low.
A representative of XRS declined to comment on the statements from various law firms. A representative of the Briscoe Law Firm, with offices in Dallas and Houston, declined to comment; representatives of other law firms could not be reached for comment.
According to the company’s most recent annual filing with the U.S. Securities and Exchange Commission, there were only 99 shareholders of the company’s stock on December 13, 2013. The stock has not traded above $6 per share since December 2004.
XRS reported revenue of $56.2 million for its fiscal 2013, ending September 30, 2013, and a profit of $866,000 for the year. In fiscal 2012, the company reported revenue of $63.1 million and a loss of $10 million. The company said that the 10.9 percent drop in revenue between 2012 and 2013 was due to the company’s ongoing transition away from its legacy hardware to the mobile platform.
The company’s web site says that it’s been in the “road science” business since 1985. The company changed its name from Xata Corp. to XRS Corp. in 2012 to reflect its switch to a new mobile platform.
XRS won a 2013 Tekne Award in the Mobile Technologies category form the Minnesota High Tech Association.