Symbility Solutions’ (TSXV:SY) acquisition of customer contracts from The Innovation Group will put the company in a better position to scale its business, says Cormark analyst Richard Tse.
In a research update to clients today, Tse reinstated coverage of Symbility following a bought deal offering of $5.1-million that Cormark particpated in. The raise helped to fund the $6.6-million acquisition of customer contracts from The Innovation Group.
Tse says The Innovation Group pickup is a nice tuck-in acquisition for Symbility and notes that it adds revenue of $4.1-million and EBITDA of $2-million in 2015. He says the move will hasten and improve Symbility’s business plan.
“In our opinion, Symbility will be in a better position to scale its business with the above-noted TIG assets by providing greater Management focus in what’s been an expanding market for the company where Symbility has grown its international sales by ~250% over the last three years with Europe being a key driver of that growth where some marquee wins have potential contract values bigger than Farmers’ former annual contribution,” said Tse.
In a research update to clients today, Tse reiterated his “Buy” recommendation and one year target of $0.60 on Symbility Solutions,