WageWorks (WAGE): Acquisition Bodes Well For FY17 Guidance - Needham
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Needham & Company analyst, Mayank Tandon, reiterated his Buy rating on shares of WageWorks (NYSE: WAGE) after it entered into a definitive agreement to acquire ADP's Consumer Health Spending Account and COBRA businesses.
The acquisition is consistent with management's strategy to supplement solid organic growth with targeted acquisitions to expand its scale in the benefits administration space. Along with the acquisition, the newly formed partnership with ADP could provide a gateway into ADP's large client base into which WAGE can offer its services, potentially boosting its long-term growth prospects. The deal is expected to close at the end of November and be accretive on an adjusted EBITDA basis in FY17.
The analyst is leaving his estimates unchanged pending the close of the transaction and WAGE's 3Q earnings results.
Shares of WageWorks closed at $57.50 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Mergers and Acquisitions
Related EntitiesNeedham & Company, Earnings, Definitive Agreement
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