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Wednesday, June 23, 2021

Here is why General Finance Corporation (GFN) stock surging on Friday’s pre-market

General Finance Corporation (GFN) stock is skyrocketing on Friday, April 16, 2021, pre-market. As of this writing, it has surged 57.85%. GFN’s stock lost -0.41% to close Thursday’s session at $12.17. GFN shares have risen by 96.93% over the last 12 months, and they have moved up by 4.91% in the past week.


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Let’s try to find out the reason behind its exceptional pre-market gain.

United Rentals acquiring General Finance Corporation

On April 16, 2021, General Finance Corporation announced that it has signed a definitive agreement with United Rentals under which it will be acquired by the United Rentals Inc. The acquisition value will be $996 million, acquiring General Finance for $19 per share in cash including the assumption of $400 million of net debt.

The boards of directors of United Rentals and General Finance unanimously approved the transaction.

Thirty-seventh Dividend declaration

On April 09, 2021, the board of directors of General Finance Corporation announced the dividend of $2.225 per share on its 9.00% Series C Cumulative Redeemable Perpetual Preferred Stock.  This dividend is payable on April 30, 2021, to preferred stockholders of record as of April 29, 2021.

Recent financial results

On February 8, 2021, General Finance Corporation announced its consolidated financial results for the second quarter and six months ended December 31, 2020.

Q2 2021 financial highlights

  • GFN generated total revenues of $89.1 million in Q2 2021, compared to $92.1 million for the second quarter of the fiscal year 2020.
  • For the 2nd quarter of 2021, adjusted EBITDA was $26.8 million, compared to $26.4 million for the second quarter of the fiscal year 2020.
  • THE adjusted EBITDA margin was 30% in Q2 2021, compared to 29% in the second quarter of the fiscal year 2020.
  • For Q2 2021, net income attributable to common shareholders was $8.3 million, or $0.27 per diluted share, compared to net income attributable to common shareholders of $9.5 million, or $0.30 per diluted share, for the second quarter of the fiscal year 2020.

Half-year financial highlights

  • Total revenues were $171.5 million for the first six months of the fiscal year 2021, compared to $182.0 million for the first six months of the fiscal year 2020.
  • For the 2021 half-year, Adjusted EBITDA was $48.0 million, compared to $51.5 million for the first six months of the fiscal year 2020.
  • THE adjusted EBITDA margin was the same 28% for both periods.
  • For the first six months of the fiscal year 2021, net income attributable to common shareholders was $11.5 million, or $0.38 per diluted share, compared to net income attributable to common shareholders of $14.5 million, or $0.46 per diluted share, for the first six months of the fiscal year 2020.

Conclusion

The acquisition news is the reason behind its surging in the Friday pre-market session and we can see the trend continues after the weekend as well.

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