SciQuest Cut To Market Perform By Raymond James

Raymond James analysts believe the shopping period to buy SciQuest, Inc. SQI share s are over now. They think the time has come to downgrade the stock to Market Perform from Outperform. Since it's being acquired, there is no price target.

The brokerage comments come on the heels of SciQuest and Accel-KKR reaching an acquisition agreement that called for a go-shop period of 25 days following the acquisition. The analysts thought that there was every possibility of another suitor or financial buyer entering the fray. However, to their disappointment, that didn't materialize.

As a result, the company is all set to go private now. The price paid for it was $17.75 a share valued SciQuest at 3.3x Raymond James 2016 revenue estimate. The price represented a total of $509 million equity value. The transaction also represented a 34 percent premium before the announcement of the acquisition news.

"We had previously seen opportunity for a higher multiple, especially with the broader SaaS group trading at ~4.5x 2016 revenue and SciQuest's recent re-platforming efforts potentially improving bookings and top-line growth as well as improved execution in the business," the analysts said in a research note.

The transaction is predicted to close in the third quarter of the current year. The brokerage cited the SEC filings to indicate that SciQuest had a minimum of preliminary discussions with 14 suitors on the possible acquisition. That included 11 financial parties, as well as three tactical suitors.

On Friday, the stock shed 0.85 percent.