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Verra Mobility (VRRM) to Buy Back Shares Post Secondary Offering

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Verra Mobility Corporation (VRRM - Free Report) yesterday announced that its shares are being offered in a secondary transaction by Platinum Equity, LLC’s affiliate. The latter is Verra Mobility’s principal shareholder.

Concurrently, the company communicated that it entered a share buyback program with the above-mentioned associate of Platinum Equity (referred below as the selling stockholder).

Verra Mobility’s shares lost momentum yesterday, with shares declining 3.17%. The trading session ended at $14.95.

We believe that the company’s buyback actions reflect its shareholder-friendly policies and strong cash position.

Inside the Headlines

As noted, the selling stockholder offered 8 million shares of Verra Mobility’s Class A common stock in the secondary offering. Also, they intend on granting underwriters the option to repurchase 1.2 million shares in a 30-day period. The proceeds from the secondary offering will go to the selling shareholders.

Regarding the share repurchase program, Verra Mobility noted that it will buy back Class A common stock worth $100 million from the selling stockholder. In lieu, the company will pay per-share consideration (which will be the same as the price paid by the underwriters in the secondary offering) to the selling stockholder.

Verra Mobility intends on closing the share buyback program as soon as the secondary offering consummates.

Prior to the announcement, the company, on Aug 9, communicated that its board of directors approved a $100-million share buyback program. The authorization is valid for the coming 12 months.

Zacks Rank, Price Performance and Earnings Estimates

Verra Mobility presently carries a Zacks Rank #3 (Hold). It specializes in providing mobility technology solutions. A rise in leisure travel, leading to high demand for rental cars, and red-light and speed-related programs from government agencies are benefiting the company. High costs, and operating and selling expenses might be concerning.

In the past three months, shares of Verra Mobility have declined 0.2% against the industry’s growth of 8.4%.


Zacks Investment Research
Image Source: Zacks Investment Research


The Zacks Consensus Estimate for the company’s earnings is pegged at 54 cents for 2021 and 91 cents for 2022, reflecting a decline of 22.9% and growth of 4.6% from the 30-day-ago figures. The consensus estimate for third-quarter earnings, pegged at 18 cents, mirrors a decline of 14.3% from the 30-day-ago figure.    

VERRA MOBILITY CORP Price and Consensus


VERRA MOBILITY CORP Price and Consensus


Other Stocks With Active Buyback Program

Some other stocks in the industry, which are engaged in repurchasing shares, are Brady Corporation (BRC - Free Report) , Johnson Controls International plc (JCI - Free Report) and Allegion plc (ALLE - Free Report) . While Brady currently carries a Zacks Rank #2 (Buy), both Johnson Controls and Allegion carry a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the first nine months of fiscal 2021 (ended April 2021), Brady repurchased shares worth $3.6 million, while Johnson Controls bought back shares worth $1,001 million in the first nine months of fiscal 2021 (ended June 2021). Allegion repurchased $199.8 million worth of shares in the first half of 2021.