Alight Solutions (ALIT) PT Raised to $13 at UBS

UBS analyst Kevin McVeigh raised the price target on Alight Solutions (NYSE: ALIT) to $13.00 (from $12.00) while maintaining a Buy rating.

The analyst comments "Before the market open Alight Solutions signed a definitive agreement to sell its Professional Services segment and its Payroll & HCM Outsourcing businesses [~30% of FY23 revenue] to an affiliate of H.I.G. Capital for up to $1.2b [$1b cash + $200m seller notes ($150m contingent on 2025 business unit performance]. The deal has been approved by Alight’s Board of Directors and is expected to close mid-2024. This values the Payroll & Professional Services business at a ~10x 2023 adjusted EBITDA and 24x 2023 unlevered free cash flow. Importantly, Alight and the Payroll & Professional Services business will establish a commercial partnership. Alight expects to use the net after-tax cash proceeds to reduce debt, return capital and for general corporate purposes, including reinvestment into growth opportunities. ALIT also authorized the repurchase of up to an additional $200m of stock, or total amount authorized $248m."

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