Progress Software to Acquire Domo's Core Business for $400M Cash
DOMO has more than doubled off its 52-week low of $1.84.
Summary
Domo is selling its AI and data platform business to Progress Software for $400 million in cash, a deal that follows months of strategic review and a going concern warning. The company will retain its net operating losses and public listing, while Progress expects Q3 results at or above prior guidance. This transaction provides a lifeline for Domo, which faced a debt covenant default and had been in advanced negotiations since June. The sale effectively monetizes the core operations, leaving a shell with valuable tax assets. The poison pill adopted today protects those NOLs, signaling the company intends to preserve them for future use. For Progress, the acquisition adds Domo's platform to its portfolio and is expected to be immediately accretive. Under certain circumstances, Domo will be required to pay Progress a termination fee of $13.5 million.
At the time of this announcement, DOMO was trading at $3.89 on NASDAQ in the Technology sector, with a market capitalization of approximately $142.2M. The 52-week trading range was $1.84 to $18.49. This news item was assessed with neutral market sentiment and an importance score of 9 out of 10. Source: Reuters.