Does RetailMeNot Deal Read Through For Comparable Peers?

Zeroing In On Competition

Analyst Blake Harper said Quotient Technology Inc QUOT is also frequently compared to RetailMeNot. However, the analyst is of the view that Quotient's Retailer iQ service, data assets and business model are the primary revenue drivers, possessing a different business model than RetailMeNot.

"QUOT is trading at 2.1x EV/Sales, 15.0x EV/EBITDA, and 27.3x P/E," the analyst said.

Deal: The Ideal Outcome

Loop Capital Markets believes the deal, which is priced at a 50 percent premium to Monday's closing price and a 36 percent premium to the average closing price for the past 60 calendar days, is an ideal outcome at this point.

"Based on yesterday's closing share price of $7.75, SALE is down almost 17 percent YTD and is down over 63 percent from its $21 per share IPO in 2013," the firm said.

The firm also referred to the company's struggling transition to mobile business.

"We believe RetailMeNot will benefit from HCH's expertise in payments, research & analytics, marketing and retailing products, helping it to process its promotional coupon ads with greater efficiency and accuracy," the firm concluded.

Based on the offer price, Loop Capital Markets raised its price target for the shares of RetailMeNot to $11.50. The firm rates the stock a Hold.

At Time Of Writing

• Groupon shares were up 0.27 percent at $3.76.
• Quotient Technology was surging up 7.98 percent at $10.15.
• RetailMeNot was soaring 49.03 percent at$11.55.

Loop Capital On RetailMeNot: 'Waiting For In-Store,' Starts At Hold Physical Retail Isn't Dying: Here's How To Play It