Nasdaq Champs.......9-01-06

Intergraph Corp. (INGR)

Last Trade: 43.90
Trade Time: 4:00PM ET
Change: Up 6.54 (17.51%)

Intergraph Shares Rise After Sale Agreement; Analyst Says Deal Undervalues Company

Shares of mapping software maker Intergraph Corp. rose Friday, after an analyst said the company is worth more than the $1.3 billion an investor group agreed to pay for it in a buyout announced Thursday.

"We believe another buyer should be interested in Intergraph at the current buyout valuation," Jefferies & Co. analyst Matthew G. McKay wrote in a research note.

Intergraph shares climbed $6.12, or 16.4 percent, to $43.48 in morning trading on the Nasdaq. The stock has traded in a 52-week range of $30.04 to $51.77.

Intergraph said Thursday it agreed to be acquired by an investor group led by private equity firms Hellman & Friedman LLC and Texas Pacific Group. Under the deal, Intergraph stockholders would receive $44 per share in cash. Intergraph expects the deal to close in the fourth quarter.

But McKay said Intergraph is selling out at discount to its true value.

"By selling now and at this valuation, we do not believe management is capturing the value of future patent infringement collections and the likely start of a significant product introduction cycle in 2007," McKay wrote in a research note.

The company is ready for a "robust launch" of new products later this year and through 2007, which is the result of a significant investment that depressed operating income over the past year, making the company appear under valued, according to the analyst.