On Friday, Truist Securities maintained a Buy rating on Biote Corp. (NASDAQ:BTMD) stock with a steady price target of $9.00. Biote Corp. has entered into an agreement with Marci Donovitz that involves the repurchase of $60 million worth of shares over the next three years.
This deal also includes the cancellation of 4 million Earnout shares, effectively reducing the company's shares by approximately 12.3 million at an average price of $4.88 each. This repurchase price reflects a 26% discount to the closing price the day before the announcement.
The initial repurchase of $30 million worth of shares will be financed through a combination of cash on hand and debt. The remaining amount is expected to be covered by cash generated from operations over the subsequent three years, as indicated by the company's management.
This recent move is part of a larger buyback plan that, when combined with an earlier repurchase agreement with Gary Donovitz, will result in Biote Corp. buying back a total of 26.7 million shares and cancelling 8 million Earnout shares. This will effectively reduce the company's total share count by around 41%.
The repurchase agreement with Marci Donovitz follows a similar strategy previously implemented with Gary Donovitz. The combined effect of these transactions is seen as a positive development for Biote Corp. by Truist Securities. The firm's endorsement of the stock remains unchanged, with the price target set to $9.00, indicating confidence in the company's financial strategy and future prospects.
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