"Our bottom-up analysis suggests that Global's growth is likely to exceed 10 percent over the next two years, which is ahead of the Street and management's high-single digit growth target," analyst James Schneider wrote in a note.
Schneider estimates that OpenEdge is only 11 percent of Global's revenues but is expected to account for roughly 20–25 percent of its growth in the future.
"We believe OpenEdge will increase Global's penetration of high-growth verticals in the US, and is in the early stages of being expanded internationally," Schneider continued.
Further, Schneider stated, "[C]ost and revenue synergies from the Heartland deal are likely to exceed investor expectations," resulting in above peer growth in the medium term. The analyst projects the Heartland portfolio to grow revenue by 11 percent in aggregate in FY17.
It should be noted that Global is already ahead of its FY17 cost synergy target of $50 million and could exceed its $125 million target for FY18. In fact, the analyst believes over $150 million is possible given upside from both platform and other costs.
"Finally, we believe Global can benefit from industry consolidation, resulting in more benign pricing and lower churn," Schneider added.
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