A Charleston technology company thinks its stock is cheap.
So it’s going on a buyback binge.
Blackbaud Inc. announced March 4 that it will repurchase 7 percent to 10 percent of its outstanding shares from investors by the end of the year. The plan includes a $200 million agreement to acquire 2.1 million shares through Bank of America on Tuesday for $95 each, representing a hefty premium.
In a written statement, CEO Mike Gianoni said the move “reflects our confidence in Blackbaud and upside value creation ahead.”
“Our five-point operating plan is driving meaningful improvements in our operating and financial results and fueling significant free cash flow. … We believe our stock is undervalued and does not represent Blackbaud’s significant market opportunities. We are excited about Blackbaud’s long-term growth prospects and committed to enhancing shareholder value,” he said.
Blackbaud, which went public on the Nasdaq in 2004, has issued about 54.5 million shares with a total market value of about $3.8 billion as of Monday.
The company’s board announced Jan. 17 that it doubled its buyback spending plan to a maximum of $500 million from $250 million. It set no deadlines or expiration date for the program. Since then, Blackbaud has repurchased stock totaling $36 million.
The company it will finance this year’s buybacks with funds on hand, operating cash flow and by borrowing money if necessary.
Shares of Blackbaud were down about 20 percent from their 52-week high of $88.56 as of Friday. BLKB was up more than 1.9 percent to $71.72 in early trading Monday.
Headquartered on Daniel Island, Blackbaud is among the world’s largest providers of software and services designed to help charities, private schools and other nonprofit groups raise money to fund their operations.
