Identifying Acquisition Targets

Tuesday's announcement that Sumitomo's tire supply unit TBC Corp. had agreed to buy auto repair chain Midas (MDS) for $11.50 per share was a long-time coming. Yet I must still admit my surprise when fellow Real Money contributor Tim Melvin informed about the deal upon my return to my office mid-morning. The asset-rich Midas has struggled during the past couple of years. But in the past several months, the stars began to align, signaling that something was going to happen.

The takeover price represents a 27% premium to Friday's close, and although I believe that the company is worth more than the $173 million TBC offered, Midas shares are up more than 120% since early August. That's the second name I have had taken over since November, when General Dynamics (GD) acquired Force Protection....487 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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