UPDATE: Benchmark Company Reiterates on Perion Network Ltd. Following Announcement of Conduit Merger
In a report published Tuesday, Benchmark Company analyst Daniel L. Kurnos reiterated a Buy rating on Perion Network Ltd. (NASDAQ: PERI), and raised the price target from $16.00 to $19.00.
In the report, Benchmark Company noted, “Yesterday, Perion (PERI-Buy, PT from $16 to $19) announced it had entered into what amounts to a reverse merger with a portion of privately-held search giant Conduit in an all-stock transaction. Conduit shareholders will receive an 81% stake in Perion in return for Conduit's Client Connect business, which generated nearly $280 million in revenue and $89 million in EBITDA, including 64% and 74% growth in 1H13 respectively, on a TTM basis. Perion will become the third largest affiliate search provider and fourth largest US search provider with a 2% domestic market share. We view the transaction as a significant positive for Perion, giving the company instant scale at a sub-market purchase multiple of 5.5x 2014E EV/EBITDA assuming what we believe is a conservative outlook for Conduit, including no benefit from cost synergies or leverage from existing distribution relationships.”
Perion Network Ltd. closed on Monday at $11.72.
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