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FARO Technologies Inc. (NASDAQ:FARO) released supplemental disclosures Wednesday related to its planned merger with AMETEK Inc., following shareholder litigation and regulatory updates. The information was provided in a press release statement and filed with the Securities and Exchange Commission. The disclosure comes as FARO’s stock trades near its 52-week high of $44.03, having delivered an impressive 175% return over the past year.InvestingPro analysis shows FARO’s stock has demonstrated strong momentum, with multiple indicators suggesting the stock is currently in overbought territory. Subscribers can access 14 additional ProTips and a comprehensive Pro Research Report for deeper insights into FARO’s valuation and market position.
According to the filing, after FARO announced its merger agreement with AMETEK on May 6, two lawsuits were filed by purported shareholders in the Supreme Court of the State of New York on June 19 and June 20. The complaints, along with several demand letters, allege that FARO and its board of directors failed to disclose certain material information in the proxy statement regarding financial projections, analyses by FARO’s financial advisor, potential conflicts of interest, and the sales process leading up to the merger. Plaintiffs seek to enjoin the merger and request additional disclosures, as well as other remedies.
FARO stated it believes the claims are without merit and that its proxy statement complies with applicable laws. The company said it is providing supplemental disclosures voluntarily to avoid delays or added costs related to the merger.
Among the supplemental information, FARO clarified that none of the confidentiality agreements with potential buyers prevented topping bids for the company. The company also disclosed that AMETEK’s proposal did not include terms or guarantees regarding executive officer employment post-merger.
Additional financial details were provided, including estimated unlevered after-tax free cash flows of approximately $79 million in the terminal year and net cash of $24 million to $31 million as of March 31, 2025. FARO’s financial advisor, Evercore, estimated implied equity values per share in the range of $30.25 to $46.25, compared to the merger consideration of $44.00 per share.
The company also updated comparative analyses of selected publicly traded companies and precedent transactions, and noted that its directors and officers who own FARO shares will receive the same merger consideration as other shareholders.
On the regulatory front, FARO reported receipt of antitrust clearances from the U.S. Federal Trade Commission, the German Federal Cartel Office, and the Austrian Federal Competition Authority. Approval in Romania is still pending.
The merger remains subject to shareholder approval at a special meeting scheduled for July 15, 2025.
In other recent news, FARO Technologies reported impressive first-quarter 2025 earnings, significantly exceeding analyst projections. The company achieved an earnings per share (EPS) of $0.33, far above the forecasted $0.0922, with revenues reaching $82.9 million, slightly above the expected $80.75 million. In light of these results, Needham analysts raised FARO’s stock price target to $38, maintaining a "Buy" rating, while Craig-Hallum increased their target to $45, also retaining a "Buy" rating. Additionally, FARO Technologies announced a definitive agreement for acquisition by AMETEK at $44 per share, prompting Needham to downgrade the stock from Buy to Hold due to the acquisition and current market valuation.
The company also held its Annual Meeting of Shareholders, where Moonhie Chin and Yuval Wasserman were elected to the board, and Grant Thornton LLP was ratified as the independent accounting firm for 2025. Shareholders approved the executive compensation package and an amendment to the 2022 Equity Incentive Plan. FARO Technologies has launched seven major products in the last six months, which have strengthened its market position. The company projects Q2 2025 revenue between $79 million and $87 million, anticipating potential challenges in the hardware market but remains optimistic about its strategic initiatives.
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