Brean Capital Raises Price Target as Tech Data (TECD) Announces Tech Solutions Segment Acquisition
Get daily under-the-radar research with StreetInsider.com's Stealth Growth Insider Get your 2-Wk Free Trial here.
Brean Capital reiterated a Buy rating on Tech Data (NASDAQ: TECD), and raised the price target to $105.00 (from $82.00), following the company's announced acquisition of AVT’s Technology Solutions segment. The deal may not close for as much as 9 months. However, if TECD executes through CY19, this should be 10x - 14x a normalized EPS of ~$12.00.
Analyst Ananda Baruah commented, "TECD announced acquisition of AVT’s Technology Solutions (TS) segment to strengthen TECD’s position providing end-to-end IT distribution from data centers to the living room. The deal is expected to significantly broaden TECD’s value-added distribution business in the Americas and Europe, while introducing TECD to the fast-growing APAC region. Significant EPS accretion is expected at deal close from the acquired $9B and $310M+ in TTM AVT's TS sales and operating income, compared to standalone TECD revenue and EBIT of $26B and $338M in TTM TECD sales and operating income. The new TECD will have $35B in revenue with distribution in high-value data center accounting for 45% of the revenue mix compared to 29% before. TECD believes that TTM pro-forma operating income would have more than doubled if accounting for EBIT from TECD and AVT's TS respectively, as well as $100M of cost savings."
Shares of Tech Data closed at $84.80 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: Stifel Downgrades PennTex Midstream Partners, LP (PTXP) to Hold
- UPDATE: Stifel Downgrades Arc Logistics Partners (ARCX) to Hold
- Wedbush Raises Price Target on Gibraltar Industries (ROCK) to $52; Reiterates Outperform
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change, Mergers and Acquisitions
Related EntitiesDefinitive Agreement, Brean Capital
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!