The Aaron’s Company, Inc. (NYSE:), a prominent player in the equipment rental and leasing sector, has disclosed a forthcoming blackout period for its employee benefit plan. This temporary suspension of trading is linked to the company’s impending acquisition by IQVentures Holdings, LLC.
On Monday, the administrator of the Aaron’s 401(k) Retirement Plan notified participants of the expected blackout period, which will exceed three consecutive business days. This suspension will prevent plan participants from directing or diversifying investments, obtaining loans, or receiving distributions from the plan.
Today, the company issued a notice to its directors and officers, outlining the trading restrictions they will face during this blackout period. This step aligns with the requirements of the Securities Exchange Act of 1934. The notice also serves as a formal record of the blackout, as per SEC regulations.
The blackout period is a standard procedure during significant corporate events such as mergers and acquisitions. It is designed to ensure fairness and compliance with regulatory standards, particularly when access to certain plan features is temporarily restricted. For Aaron’s Company, this move is a direct consequence of the merger process with IQVentures Holdings.
In other recent news, The Aaron’s Company reported a Q2 net loss of $11.9 million, with revenues totaling $503.1 million. The company also announced an acquisition agreement with IQVentures Holdings, LLC, valuing Aaron’s at approximately $504 million. This transaction is expected to conclude by the year’s end. Aaron’s lease portfolio size saw a decrease of 2%, while its e-commerce recurring revenue written surged by 79.4%.
Following these developments, Jefferies downgraded Aaron’s stock from “Buy” to “Hold” and reduced the price target to $10.10. Loop Capital, Truist Securities, and TD Cowen also adjusted their price targets for Aaron’s shares in line with the acquisition price.
Despite a decrease in consolidated revenues and adjusted EBITDA for Q1 2024, Aaron’s demonstrated resilience and growth. The company raised its full-year outlook for non-GAAP diluted EPS, reflecting a lower estimated tax rate. TD Cowen revised its EPS estimates for Aaron’s for 2024 and 2025 to $0.25 and $0.84, respectively.
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