INGR: Good-bye Stock Exchange

Intergraph is following the lead of UGS in going private, reports Michael Paige of MarketWatch.

Hellman & Friedman and Texas Pacific Group are paying $44/share at a 20% premium to buy up the old-time CAD vendor for US$1.3 billion. Other investors and advisors include Goldman Sachs, Morgan Stanley, and JMI Equity.

Jefferies & Co. analyst Matthew G. McKay understands the real reason the buy-out is happening now: the stock is undervalued, having fallen by 25% over the last year because (1) Intergraph has been spending money on the next round of software releases; and (2) gearing up for the next round of Clipper law suits.

"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 writes.