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JMP Sees $23/Share Takeout Price For Infoblox

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JMP Sees $23/Share Takeout Price For Infoblox

Infoblox Inc (NYSE: BLOX) has reportedly received a buyout offer from Thomas Bravo, a private equity firm, and is considering hiring an advisor to look over the various strategic options. JMP Securities’ Erik Suppiger maintained a Market Outperform rating on the company, with a price target of $20.

Ideal Acquisition Candidate

Suppiger believes Infoblox’s leading market position, large installed base and “sticky” maintenance revenue stream make it an attractive acquisition candidate, particularly for private equity.

“We think it is likely that the company would be receptive to an acquisition and we believe a reasonable price would be ~$23. A share price of $23 represents a forward EV/Sales multiple of 3x, in line with the median multiple of recent IT infrastructure acquisitions in our coverage universe,” the analyst added.

Why Infoblox Could Accept An Offer

Suppiger outlined three reasons why Infoblox could accept the offer.

Firstly, the company has just completed a key product refresh and growth has decelerated more rapidly than expected.

In addition, there has been significant turnover among its executive staff over the past year, including a new CEO, CFO and Head of Sales.

Lastly, an activist shareholder, who established a new position just a few weeks ago, is likely to prompt significant cost cuts at Infoblox, which would be easier to achieve as a private firm.

Latest Ratings for BLOX

DateFirmActionFromTo
Oct 2016DowngradesOverweightEqual-weight
Sep 2016DowngradesBuyNeutral
Sep 2016UpgradesSellHold

View More Analyst Ratings for BLOX
View the Latest Analyst Ratings

Posted-In: Erik Suppiger JMP SecuritiesAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas

 

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