C2C And Evocomm Deal To Be Accretive To GCOM’s FY10 EPS
Analysts at Needham & Co maintain their "buy" rating on Globecomm Systems Inc (NASDAQ: GCOM). The 12-month target price for GCOM is set to $9.
GCOM has acquired Carrier to Carrier Telecom BV (C2C) and the assets of Evolution Communications Ltd (Evocomm) for $15 million in up front cash and an additional $10.9 million in potential earn out payments if certain milestones are met. Globecomm Systems expects the deal to be accretive to its FY10 earnings, inclusive of deal-related intangible amortization, but excluding non-recurring, deal-related charges.
According to Needham & Co, “Though a near-term dearth of high margin preengineered systems revenue is affecting near-term profitability, we continue to believe there will be an eventual pick up in these products, which when combined with the strong growth in the company’s services business, should drive the kind of leverage investors are looking for.”
