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Symbility Solutions Innovation Group acquisition will help it scale, says Cormark

Automated Benefit's Symbility division has had recent high-profile wins, adding the Chubb Insurance Canada and the property division of Farmer's Insurance as customers.
In a research update to clients today, Cormark analyst Richard Tse reiterated his “Buy” recommendation and one year target of $0.60 on Symbility Solutions

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,

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About The Author /

Nick Waddell
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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