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Accolade, Inc. (NASDAQ:ACCD), a Delaware-based company offering business services with annual revenues of $447 million and a market capitalization of $576 million, announced on Monday that it has successfully completed a merger with Transcarent, Inc., as of April 8, 2025. According to InvestingPro data, the company maintained a strong liquidity position with a current ratio of 2.63x before the merger, despite operating at a loss in recent quarters. The merger, initially detailed in a January 8, 2025 agreement, results in Accolade becoming an indirect wholly owned subsidiary of Transcarent.
In connection with the merger, Accolade's common stock, which traded under the ticker symbol "ACCD," has been delisted from the Nasdaq Stock Market. Trading of the company's stock was halted prior to market opening on the day of the merger. The stock had shown significant momentum before the merger announcement, with InvestingPro data showing a remarkable 74% price return over the past six months and a 105% return year-to-date. Get access to more detailed analysis and 12+ additional ProTips about ACCD with an InvestingPro subscription.
As per the merger agreement, each share of Accolade's common stock was converted into the right to receive $7.03 in cash, the agreed merger consideration. This conversion also applies to certain vested stock options and restricted stock units (RSUs), with unvested or underwater options and RSUs being canceled without consideration.
Furthermore, as a result of the merger, all members of Accolade's Board of Directors and certain officers have departed from the company. The management change comes as the company operated with a moderate debt level, maintaining a debt-to-equity ratio of 0.76 and total debt to capital of 0.29, according to InvestingPro analysis. Discover comprehensive insights about Accolade and 1,400+ other US stocks through InvestingPro's detailed Research Reports. This includes CEO Rajeev Singh, along with directors Jeff Brodsky, Michael Hilton, Jeff Jordan, Cindy Kent, Peter Klein, Dawn Lepore, Elizabeth Nabel, and Pat Wadors. Officers Stephen Barnes, Rob Cavanaugh, and Richard Eskew also ceased their roles with the company, with Cavanaugh and Eskew entering into separation agreements that include a year's base salary and up to 12 months of COBRA insurance continuation payments.
The completion of the merger constitutes a change in control of Accolade, with the company's certificate of incorporation and bylaws being amended and restated accordingly.
Holders of Accolade's 0.50% Convertible Senior Notes due 2026 are affected by the merger, which is classified as a Merger Event, Fundamental Change, and Make-Whole Fundamental Change under the indenture governing the notes. Noteholders now have the right to convert their notes into a cash amount, and may also require the company to repurchase their notes at a set price on May 6, 2025.
This significant corporate development is based on a press release statement and reflects the factual events surrounding Accolade's merger with Transcarent.
In other recent news, Accolade Inc . announced that its shareholders have approved a merger with Transcarent, with the transaction valued at $621 million. The merger, expected to finalize in the second quarter of 2025, will result in Accolade becoming a privately held entity and its stock being delisted. This acquisition will see Accolade shareholders receive $7.03 per share, a 110% premium over its stock price as of January 7, 2025. In response to the merger, Stifel downgraded Accolade's stock from Buy to Hold, reflecting a more cautious outlook and aligning its price target to the offer price of $7.03. Similarly, Raymond (NSE:RYMD) James adjusted its rating from Outperform to Market Perform, noting the valuation metrics involved in the deal. On a more optimistic note, Truist Securities maintained a Buy rating on Accolade, highlighting the synergistic benefits of the merger with Transcarent. This merger is anticipated to enhance Accolade's market position by expanding its client base and service offerings. As part of the acquisition, Accolade has withdrawn its previous financial guidance and will not hold its scheduled conference call.
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