Shares of TheStreet, Inc. (NASDAQ: TST), a financial news and information company founded by Jim Cramer, rose more than 30 percent Thursday morning after the company said it reached an agreement to sell its institutional business units.
TheStreet said it entered into an agreement to sell The Deal and BoardEx units to Euromoney Institutional Investor PLC, a global business information and events group. The deal was unanimously approved by a special committee of independent directors and a "substantial portion" of the $87.3 million in net proceeds from the sale will be distributed to shareholders.
TheStreet CEO David Callaway will resign once the transaction is completed, the company said. Current Chief Financial Officer Eric Lundberg will serve as CEO when Callaway steps down while Margaret de Luna, current president of the company's consumer business, will become President and Chief Operating Officer.
The transaction is expected to lower TheStreet's public company costs and corporate overhead from a reduction in headcount and operations.
Callaway said in the press release the "best path to maximize" shareholder value was to take advantage of the "unique opportunity" in selling its institutional businesses.
TheStreet's board will continue exploring other strategic alternatives for its consumer business while the management team focuses on "providing exceptional coverage" of the financial markets with a focus on growing subscription revenue.
The sale of TheStreet's institutional businesses requires the approval of a majority of the outstanding shares and will be submitted for approval in the first quarter of 2019. No other regulatory approvals are expected to be required to finalize the transaction.
At time of publication, TheStreet's stock was trading up about 35.5 percent to $2.06 per share.
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