- $300 million share repurchase program authorized - largest in company history
- Company entering period of rapid growth with scaling earnings
- Strong free cash flow generation capacity
Pacira BioSciences (PCRX, Financial) has announced a significant $300 million share repurchase program, marking the largest buyback in the company's history. This initiative is backed by DOMA Perpetual Capital Management, which owns 4.2% of Pacira's outstanding shares. The buyback comes as the company shifts focus towards increasing pre-tax net income margins, reflecting its robust financial position and the Board's commitment to disciplined capital allocation.
According to Pedro Escudero, CEO of DOMA Perpetual, Pacira is entering a period of rapid growth, where scaling earnings and free cash flow facilitate substantial capital returns while maintaining growth investments. DOMA Perpetual perceives the stock as undervalued compared to its historical average and future growth potential, emphasizing the company's strength in financial performance.
From a financial perspective, the share repurchase plan offers potential benefits such as a reduced share count leading to improved earnings per share metrics, a more efficient capital structure, and potential support for the share price if the stock is undervalued. The effectiveness of this strategy relies on Pacira's management to execute the buyback and margin improvement initiatives effectively.
This strategic move is seen as a part of Pacira's broader efforts to enhance shareholder value, with DOMA Perpetual's support highlighting confidence from a significant shareholder. The company's strategic alignment towards capital returns and growth investments positions it well for future market opportunities.
