Pivot Technology Solution’s new CFO is the first domino, says Cantor Fitzgerald

Cantor Fitzgerald Canada analyst Ralph Garcea thinks the appointment of Bryan Kyle as CFO of Pivot Technology Solutions (Pivot Technologies Stock Quote, Chart, News: TSXV:PTG) is a real positive.

Yesterday, after market close, Pivot announced that Kyle would become CFO, effective immediately.

“We are extremely pleased to attract someone of Brian’s calibre to join our management team,” said CEO Kevin Shank. “His track record as a public company CFO speaks for itself, and his experience in the technology and software services industries aligns closely with our key strategic initiatives. Brian will be an integral part of the team tasked with the future expansion of Pivot. As such, he will carry responsibility for the implementation of certain strategic initiatives, such as our normal course issuer bid, as well as play a key role in helping the company further improve its financial performance. Additionally, his capital markets experience and reputation will be strong assets in the implementation of our investor relations program.”

Garcea says yesterday’s news is the “first domino” in a long list of potential catalysts for Pivot that include continued hiring at leadership positions, share consolidation, a potential graduation to the TSX, the potential for small acquisitions, and the possibility of a increased dividend in the second half of fiscal 2016.

“Brian Kyle brings over 25 years of senior financial and strategic experience to PTG,” notes Garcea. “His longest tenure was with ALSA Capital Ltd., a specialized asset management firm, where he was partner and co-founder. Prior to ALSA, Brian was with TSX-listed DH Corp., where he was CFO and oversaw six acquisitions, divested five businesses, streamlined costs, and was proactive with both the US and Canadian capital markets. Brian will be tasked with engaging with the capital markets and the future expansion of PTG to a more services centric focus. Brian has also spent time with Teranet, where he helped orchestrate a $1B IPO on the TSX and its subsequent $1.6B go-private transaction. Brian will be responsible for implementing PTG’s NCIB and investor relations efforts with the capital markets community. Brian sees growth potential in the services area of PTG’s business – we believe Brian will materially aid PTG’s transition into a well-established, diversified business.”

Garcea thinks Pivot will generate Adjusted EBITDA of $45-million on revenue of $1.579-billion in fiscal 2016, climbing to Adjusted EBITDA of $50.6-million on a topline of $1.685-billion the following year.

In a research update to clients today, Garcea maintained his “Buy” rating and one-year price target of $1.50 on Pivot Technology Solutions, implying a return of 233 per cent at the time of publication.