Immersion (NASDAQ:IMMR) Corporation (NASDAQ:IMMR), a developer of touch feedback technology, has finalized the acquisition of assets from Barnes & Noble Education, Inc. (NYSE:BNED), as detailed in a recent SEC Form 8-K filing. The transaction was completed on Monday, June 10, 2024, following BNED stockholders' approval on June 5, 2024.
The deal involved a rights offering and a private investment in public equity (PIPE) transaction. The rights offering allowed existing BNED stockholders to purchase up to 900 million new shares at $0.05 per share, generating $45 million in gross proceeds, with Immersion's subsidiary, Toro 18 Holdings, LLC, partaking as a significant investor. Additionally, Toro 18 Holdings acquired 900 million new BNED shares for $45 million in a separate PIPE transaction.
As part of the agreement, Immersion Corporation, through Toro 18 Holdings, purchased 200,670,135 shares of BNED Common Stock and was reimbursed $2,450,000 for related legal and other expenses. Immersion was also paid an equal amount for its commitment to backstop the rights offering.
Following the close of the transaction, Eric Singer, William C. Martin, Emily S. Hoffman, and Elias Nader, current members of Immersion's board, along with Sean Madnani, were appointed to BNED's board of directors. Kathryn Eberle Walker and Denise Warren, existing BNED directors, will continue their service on the board.
Subsequent to the acquisition, BNED implemented a reverse stock split at a 1-for-100 ratio, effective as of 5:01 p.m. Eastern Time on Tuesday, June 11, 2024. This move adjusted the shares acquired by Immersion to reflect the consolidation.
The financial statements and pro forma financial information related to the acquisition are not included in the current report but are expected to be filed within the prescribed SEC timeframe.
This strategic move by Immersion Corporation reflects a significant expansion of its business interests and a diversification into the education sector. The impact of this acquisition on Immersion's financials and market position will be closely watched by investors and industry analysts.
The details provided in this article are based on Immersion Corporation's SEC filing and are intended to offer readers an overview of the transaction's key elements without any speculative or promotional content.
In other recent news, Barnes & Noble Education reported preliminary unaudited financial results for the fiscal year ending April 27, 2024, showing a slight increase in revenue and a reduction in net losses. The company's consolidated GAAP revenue rose to approximately $1,567 million, up from $1,543 million in the previous year. Net losses improved to approximately $(63) million, a significant decrease from the previous year's $(90) million.
In a move towards financial stability, Barnes & Noble Education is progressing with proposed transactions aimed at substantially reducing its debt and investing in innovation. The company also plans to issue 900,000,000 shares at $0.05 per share in a rights offering, with proceeds intended to reduce the balance under the company's existing loan facility.
On a different note, Immersion Corporation retained its Buy rating from BWS Financial, following stronger-than-expected fourth quarter results driven by increased automotive and video game revenue. The company's diversification into the automotive sector has contributed to a more stable revenue stream, which is expected to continue as the adoption of haptic technology in vehicles increases. BWS Financial also noted that a recent settlement with Meta Platforms (NASDAQ:META) is projected to further increase Immersion's cash balance. These are the latest developments in the companies' operations.
InvestingPro Insights
As Immersion Corporation (NASDAQ:IMMR) ventures into the education sector with its recent acquisition, investors may find the following InvestingPro Insights noteworthy. The company holds a market capitalization of approximately $325.56 million and has demonstrated a remarkable revenue growth of 84.93% in the last twelve months as of Q1 2024. This growth is further emphasized by a quarterly revenue surge of 519.83% in Q1 2024, signaling a potentially transformative impact on Immersion's financial trajectory post-acquisition.
InvestingPro Tips suggest that Immersion's financial health is robust, with the company holding more cash than debt and liquid assets that exceed short-term obligations. Moreover, analysts are optimistic about the company's sales growth in the current year. With a P/E ratio of 7.26 and an adjusted P/E ratio of 9.08 for the last twelve months as of Q1 2024, Immersion trades at a valuation that may be attractive relative to near-term earnings growth. Additionally, the company's stock is trading near its 52-week high, having achieved a strong return of 58.03% over the last six months.
For readers interested in a deeper analysis, InvestingPro offers a comprehensive suite of additional tips on Immersion Corporation's stock. To explore these insights, visit https://www.investing.com/pro/IMMR and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 11 additional InvestingPro Tips available, investors can gain a more nuanced understanding of the company's market potential and investment profile.
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