One notable Canadian entrepreneur says he is proud of creating tech jobs in Canada, and wishes more people would think about the ramifications of selling out to U.S. concerns.
Mediagrif (TSX:MDF) CEO Claude Roy presented today at the Euro Pacific Canada Digital Media and Technology Conference in Toronto. Roy, who was CEO of Logibec when the health care software company sold to OMERS Private Equity in 2010, says he is proud of the fact that the jobs he created in Quebec stayed there.
“I wish more people would think about that,” said Roy. “if we keep selling our companies off to the U.S., where will our children work?”
Roy’s current company, Mediagrif, was founded in 1996. The Longueuil, Quebec-based company offers a range of e-commerce services through B2B platforms such as The Broker Forum, Power Source Online, and Carrus Technologies.
Euro Pacific Canada analyst Amr Ezzat says, like Logibec, the focus of Mediagrif’s growth is acquisitions.
In a recent note of Mediagrif, which he has a “Buy” rating on, Ezzat noted that shares of the company tend to outperform when the company makes an acquisition, and that it has a strong track record of valuation creation through what he describes as “disciplined and accretive acquisitions”. While things are currently quiet on the M&A front, the analyst thinks investors should accumulate shares of Mediagrif, because he believes it is undervalued compared its competitors.
“Peers are trading at a ~27% premium to MDF on an NTM EBITDA basis, despite MDF’s superior FCF generation, healthier return profile, and best in class EBITDA margins (38.6% LTM vs. peers’ 16.5%),” said Ezzat. “While expected top line growth is slower than that of peers, we note that it does not include acquisitions and MDF is growing EPS at a faster pace than comps. We do anticipate the Company to be acquisitive.”
Roy notes that Mediagrif’s consumer facing businesses, Jobboom, LesPac, a classified ads site that competes with Kijiji and Reseau Contact, a dating site, operate with high margins. He expects the company’s EBITDA margins will settle in the 40% range.