Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of ViroPharma soared 25% today after Irish drug giant Shire agreed to acquire the biotechnology company for $4.2 billion.
So what: The all-cash deal values ViroPharma at $50 per share and represents a 27% premium to its closing price on Friday. Shire is making the move to strengthen its portfolio in the increasingly lucrative rare disease drug segment, and judging by its own stock's small gain today, Mr. Market is pleased with the price it's paying to do it.
Now what: Shire expects the deal to close in the last quarter of 2013 and be immediately accretive to its earnings.
"Shire has conducted a thorough and collaborative due diligence process over the last few months and, following completion of the transaction, the integration process will be focused on delivering value to all stakeholders," Shire CEO Flemming Ornskov said. "This acquisition is expected to create a $2 billion rare disease revenue base and delivers further strong growth prospects."
So while ViroPharma is likely all popped out at this point, Shire's newly bolstered potential might be worth a closer look.
Another compelling growth stock
This incredible tech stock is growing twice as fast as Google and Facebook, and more than three times as fast as Amazon.com and Apple. Watch our jaw-dropping investor alert video today to find out why The Motley Fool's chief technology officer is putting $117,238 of his own money on the table, and why he's so confident this will be a huge winner in 2013 and beyond. Just click here to watch!
The article Why ViroPharma Inc. Shares Skyrocketed originally appeared on Fool.com.
Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.