Compellent Stock Soars on Report of Possible Sale
Shares of Compellent Technologies, Inc., soared late Tuesday and Wednesday following news about a possible sale.
Reuters on Tuesday reported that the Eden Prairie-based company has met with several investment banks to advise it on options-a sale being one of them.
Compellent's stock closed up 10.9 percent at $19.70 on Thursday-making it the day's fourth-largest gainer on the New York Stock Exchange (NYSE). Shares were up 23.9 percent to $24.40 at noontime trading on Wednesday-making it the single largest NYSE gainer within the first half of that day.
In its report about the possible sale, Reuters cited unnamed sources “familiar with the situation.” During a Tuesday conference call to discuss Compellent's third-quarter earnings, CEO Philip Soran declined to comment on whether the company has hired a bank to explore options-and a company representative did the same Wednesday afternoon.
“We don't really have anything to add to the rumors and speculation,” spokesman Liem Nguyen told Twin Cities Business. He attributes the recent surge in the company's stock to its strong third-quarter earnings, which were announced Tuesday.
Specifically, Compellent reported a record $42.1 million in quarterly revenue, representing a 31 percent increase from the same period last year and topping the $38 million that analysts had expected. Earnings also rose sharply-47 percent over last year's third quarter-to $3.3 million.
The Reuters report said that Compellent has held preliminary meetings with several investment banks, including San Francisco-based Qatalyst Partners and New York City-based Morgan Stanley.
Compellent, founded in 2002, provides data storage solutions within a 35-country sales network. In April, Forbes named it the fourth fastest-growing tech company in America.
An unnamed source cited in the Reuters report indicated that possible buyers could include Dell, Hewlett-Packard (HP), IBM, Oracle, NetApp, EMC, and Cisco Systems, Inc.
Rumors about a possible sale started earlier this year when Compellent rival 3Par, Inc., was at the center of a bidding war between HP and Dell. HP eventually won, paying $33 per share in cash in a deal valued at $2.35 billion.
Qatalyst Partners advised Fremont, California-based 3Par in its sale. Morgan Stanley was a lead underwriter for Compellent's initial public offering in 2007.
Compellent is among Minnesota's 80-largest public companies based in its revenue, which totaled $125.3 million in 2009-up 38 percent from 2008.