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Chinese company Foxconn agrees to buy Calgary’s SMART Technologies

The deal would see the Chinese electronics giant buy all SMART Technologies's outstanding shares for a cash payment of $4.50 per common share

May 26, 2016

by Jenn Mentanko

Foxconn Technology Group has agreed to buy Calgary-based SMART Technologies in a deal that would see the Chinese electronics giant buy all SMART Technologies’s outstanding shares for a cash payment of $4.50 per common share.

That’s a 21 per cent premium over the average weighted share price for the past 90 days, and a far cry from its $2.19 trading price in January.

SMART Technologies, known for its interactive whiteboards, has been on the steady decline for years. The company went public in July 2010, raising $600 million with its IPO, and reaching $17 per share by the end of its first day. Since then, revenue declined and share prices plummeted as the company missed targets.

In a 2012 interview with Alberta Venture, Brian Piccioni, an analyst with BMO Capital Markets, predicted it would be difficult for SMART to penetrate the business market, stating suppliers already exist and competitors are already offering similar products.

“The business market is going to be a much smaller market than the education market,” said Piccioni.

There was renewed optimism for the company among market watchers in 2012, when co-founders Nancy Knowlton and David Martin left the company. But the stock price has failed to reach its initial peak.

Following the arrangement agreement, Smart has dropped 10.10 per cent, currently sitting at $4.45.

The acquisition is pending regulatory approvals as well as a shareholder vote to be held in July 2016.

Foxconn, probably best known as a supplier to Apple and Samsung, is reportedly undergoing some big changes of its own. According to a report from the South China Morning Post, the company is replacing 60,000 factory workers with robots.

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