CSGS Downgraded To Hold

Kaufman Bros. has downgraded CSG Systems International

from Buy to Hold. Kaufman Bros. writes that "the risk profile of the stock has increased materially with the recent Intec acquisition. CSG is paying $372 million in cash for the U.K.-based telecom software and services vendor, equal to an enterprise value multiple of 1.1x expected fiscal 2011 revenues and a P/E multiple of 19x expected fiscal 2011 EPS. While not inexpensive given the weak revenue growth and margin profile of Intec, it is not the takeout multiple that we take issue with. Rather, we are concerned about the strategic fit of the Intec deal." Kaufman maintains its $22 price target for CSG Systems, which closed Friday at $20.65.