OptimizeRx (NASDAQ:OPRX) Corp has announced its intention to acquire Medicx Health for $95 million, a move that led to a 23% increase in the company's stock price, despite a 48% drop year-to-date and a significant fall of 52.05% over the past year according to InvestingPro Data. CEO Will Febbo disclosed the news on Thursday, triggering an investor response that defied the company's recent financial struggles, which include a declining trend in earnings per share and a decrease in revenue at an accelerating rate as highlighted in the InvestingPro Tips.
The acquisition, which is slated to be finalized in Q4 2023, will be financed through existing resources, short-term investments, and a $40 million credit facility provided by Blue Torch Capital. This strategic move is expected to leverage Medicx's strong financial profile to significantly enhance OptimizeRx's growth and profitability. This is in line with the InvestingPro Tip that OptimizeRx holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations, indicating a strong financial position to facilitate this acquisition.
In an additional show of confidence, several Medicx executives have indicated plans to reinvest approximately $10.5 million into OptimizeRx stock. This executive reinvestment plan underscores the perceived value and potential of the combined entity, despite OptimizeRx's negative P/E ratio of -10.48, as reported by InvestingPro data.
In related news, OptimizeRx also projected a Q3 2023 revenue increase to between $15.2 million and $15.5 million, demonstrating a slight uptick from last year's $15.1 million. This forecast suggests that despite its recent stock market challenges, the company expects steady revenue growth moving forward. However, it's worth noting that according to InvestingPro Data, the company's revenue growth for LTM2023.Q2 was -4.03%, indicating a need for strategic changes to reverse this trend.
The details of this development were shared by Sabela Ojea on Twitter, highlighting the potential impact of this acquisition on OptimizeRx's future business trajectory. With the company's management aggressively buying back shares, as noted by InvestingPro Tips, this acquisition could prove to be a turning point for OptimizeRx's financial performance in the near future. For more in-depth insights and tips, consider checking out InvestingPro, which offers a wealth of additional tips and data for informed investment decisions.
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