A new acquisition for Avante Logixx (Avante Logixx Stock Quote, Chart TSXV:XX) is getting the thumbs up from Beacon Securities analyst Gabriel Leung.
This morning, Avante Logixx announced it would acquire Ontario-based security firm Intelligarde International Inc. for $4.75-million.
“I am thrilled to welcome the Intelligarde team to the Avante platform,” CEO Craig Campbell said. “The acquisition is representative of the strategic assets that can be leveraged with our platform to provide technology-enabled security solutions to commercial and national accounts. Our thesis is that while manpower costs are increasing, technology costs are decreasing and we intend to benefit from these trends by leveraging our suite of services to provide managed services that reduce overall cost of security/risk programs while upgrading effectiveness. This allows Avante to offer our clients a unique value proposition and potential savings while growing our bottom line. We are confident that Intelligarde will be a great addition to the Avante platform as we continue to execute on our strategic plan.”
Leung says this pickup makes sense.
“In our opinion, the acquisition of Intelligarde is very complementary to the company’s recent acquisition of Veridin Systems, which is a security systems integrator with a nationwide commercial client base,” the analyst says. “Clearly, the company is looking to diversify its platform beyond its traditional focus on high-end residential neighborhoods into the commercial market, which is an area that current CEO Craig Campbell knows very well (his previous company Total Security Management, which was sold to GardaWorld was commercial sector focused). Given Mr. Campbell’s extensive commercial contact list, combined with Avante’s expanding commercial platform, we believe the company could be positioned to accelerate organic growth via larger contracts over the near-term.”
In a research update to clients today, Leung maintained his “Buy” rating and one-year price target of $3.25 on Avante Logixx, implying a return of 48 per cent at the time of publication.
Leung thinks XX will post EBITDA of $2.4-million on revenue of $24.7-million in fiscal 2019. He expects those numbers will improve to EBITDA of $3.8-million on a topline of $26.1-million the following year.