INDIANAPOLIS & HAUPPAUGE, N.Y. - Vienna Parent Corporation, led by Justin Christian, has reached a definitive agreement to acquire TSR, Inc. (NASDAQ: TSRI), a prominent IT staffing firm. The acquisition, through Vienna Parent's subsidiary Vienna Acquisition Corporation, offers TSR shareholders $13.40 per share in cash, valuing the equity at roughly $29 million, a 73.8% premium over TSR's closing price on May 14, 2024.
TSR, established in 1969, has a long history in the IT staffing sector, providing services to various industries, including banking and healthcare. Vienna Parent and its subsidiary are affiliated with BCforward, a major black-owned professional services firm in the U.S., also founded by Christian.
Justin Christian, CEO of BCforward, expressed enthusiasm about the acquisition, anticipating benefits from the combined capabilities of both companies. Bradley Tirpak, TSR's Chairman, echoed this sentiment, highlighting the cultural alignment and potential for expanded services to clients. Thomas Salerno, President, and CEO of TSR, also conveyed optimism for the growth prospects post-merger.
The transaction, approved by both companies' boards, is slated for completion in the third quarter of 2024, pending the tender of a majority of TSR's outstanding shares and other customary closing conditions. Notably, the deal does not hinge on financing conditions or regulatory approvals, with Vienna Parent securing a credit commitment from First Merchants (NASDAQ:FRME) Bank and additional funds from its own reserves to finance the purchase.
FOCUS Investment Banking and Shulman Rogers (NYSE:ROG) are advising TSR on the transaction, while Ice Miller LLP is legal counsel to Vienna Parent and Vienna Sub. Chessiecap Securities, Inc. has provided a fairness opinion to TSR's Board.
This acquisition is expected to leverage BCforward's industry position and TSR's established client relationships, although the tender offer has not yet commenced. The offer will be detailed in materials filed with the SEC, which will be made available to TSR shareholders without charge.
InvestingPro Insights
As Vienna Parent Corporation sets to acquire TSR, Inc., a closer look at TSR's financial health and market performance through InvestingPro data reveals several key insights. With a market capitalization of approximately $17.27 million USD, TSR is trading at a P/E ratio of 10.49, which adjusts to an even more attractive 8.83 when considering the last twelve months as of Q3 2024. Moreover, the company's PEG ratio during the same period stands at 0.37, indicating potential undervaluation relative to its earnings growth.
TSR's revenue for the last twelve months as of Q3 2024 was reported at $88.82 million USD, though it has experienced a decline in revenue growth by -13.5%. Despite this, the company's gross profit margin remains at 17.57%, with an operating income of $2.09 million USD, affirming its capability to generate profits from its operations.
InvestingPro Tips suggest that TSR holds more cash than debt, indicating a strong balance sheet and financial stability. Additionally, the company's valuation implies a strong free cash flow yield, which could be an attractive point for investors considering the future cash-generating potential post-acquisition. It's also noteworthy that TSR does not pay a dividend, which could be a factor for income-focused investors to consider.
To gain a comprehensive understanding of TSR's financial metrics and to access additional InvestingPro Tips, visit https://www.investing.com/pro/TSRI. Currently, there are 9 additional tips available, providing deeper insights into TSR's financial health and market standing. Investors interested in a subscription can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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