Progress Software’s Big Bet: Acquires ShareFile for $875M, Pauses Dividends Why Are Progress Software (PRGS) Stocks Down Today? – Progress Software (NASDAQ:PRGS)

Progress Software Corporation PRGS shares are trading lower on Monday. The company entered into a definitive agreement to acquire ShareFile for $875 million in a combination of cash and an existing revolving credit facility.

ShareFile offers an AI-powered document collaboration SaaS solution for industries such as business services, financial services, healthcare, and construction.

ShareFile is expected to generate more than $240 million in annual revenue and attract more than 86,000 customers to Progress.

The acquisition is expected to close within Progress’ fiscal year ending November 30, 2024, subject to regulatory approvals and other customary closing conditions.

Yogesh Gupta, CEO of Progress. “ShareFile strategically fits into Progress’ Digital Experience portfolio to enable organizations to deliver more effective customer and team collaboration while simplifying secure document and content sharing.”

Suspension of dividend payments:The Board of Directors of Progress has decided to suspend the payment of quarterly dividends following the completion of the acquisition of ShareFile.

The capital will be used to repay debt, increasing liquidity for future mergers and acquisitions and share repurchases.

Perspectives:Progress expects the company’s third-quarter revenue and adjusted earnings per share to match or exceed the high end of its prior estimates for revenue of $174 million to $178 million and adjusted earnings per share of $1.11 million to $1.15. The analyst consensus is for revenue of $175.9 million and adjusted earnings per share of $1.14.

Progress plans to release its third-quarter financial results after the stock market close on Tuesday, September 24, 2024.

Investors can gain exposure to stocks through US Small Cap Stock ETF RNSCC.

Price action:PRGS shares were down 1.59% to $56.74 as of last check on Monday.

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