Some good points made here, although I've not worked through the maths as yet (and I tend to be more cautious on revenue synergies, as these are usually over-optimistic in outlook).
The main, short term value driver is how many new medium-large customers are accessed. PPH appears not to have a model for serving smaller customers at a strong margin (,.. a possible avenue for them to be disrupted in future?)
Investors will have to be patient - it will be 12-18 months before the economics of integration (including its degree of success becomes apparent). I only hope they don't go and make a bunch of other acquisitions that will muddy the waters, distract management from a customer focus to an internal focus and put pressure on the balance sheet.
I also agree that an investor presentation in the near term presenting some pro forma financials and KPIs would be good. It would also be good to convey a message of capital discipline and something along the lines of "we're now not looking for further major acquisitions". I will drop a line to Investor relations requesting the same.
I'm a hold for now and I believe the deal makes strategic sense.
PPH Price at posting:
$3.93 Sentiment: Hold Disclosure: Held
