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StockTwits CEO Howard Lindzon says LivePerson Could be Takeover Target

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Today, software company SAP (NYSE: SAP) said that it will acquire cloud service provider Ariba (NASDAQ: ARBA) for $4.3 billion. When that news hit, Ariba skyrocketed almost 20%. SAP already completed an acquisition of SuccessFactors last year and agreed to acquire Syclo last month. So, which company could be next to attract takeover interest by SAP or other software companies?

Howard Lindzon, co-founder and CEO of StockTwits, was extremely bullish on Ariba, SuccessFactors and Syclo before SAP agreed to buy them out, presumably at healthy premiums. Benzinga reached out to him to get his take.

In an email, he told Benzinga that LivePerson (NASDAQ: LPSN) could be next. Cloud-based software has been in play, and LivePerson is one of the few companies in this category that is publicly traded and priced at a reasonable valuation.

LivePerson creates cloud applications that facilitate online sales and customer service communications for businesses. The company's trailing P/E ratio near 79 might make it appear expensive, but its forward P/E ratio close to 33 tells a different story. LivePerson could create synergies with SAP, as LivePerson's services complement SAP's focus on enterprise applications. Other cloud companies that could attract near-term acquisition attention are Saba Software (NASDAQ: SABA), Rackspace Holdings (NYSE: RAX) and Keynote Systems (NASDAQ: KEYN).

Consensus analyst estimates for LivePerson's fiscal 2012 EPS are $0.42, and are $0.50 for 2013. If these expectations come true, that would be EPS growth near 19%. As a part of SAP, or another large technology company, synergies could drive this growth rate even higher. Shares of LivePerson closed today around 0.7% lower, at a price close to $16.32.

Posted-In: News M&A Best of Benzinga


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