Extract from Analyst report published today. 12 month price...

Extract from Analyst report published today. 12 month price target increased to $5.44.

”BVS has announced the acquisition of another SaaS- based wealth management software provider, FinoComp, at a purchase price of $25m funded through cash reserves. The purchase is expected to be immediately EPS accretive and helps expand the performance and cost reporting of the Sonata product in the UK market. FinoComp is forecasted to produce $6.8m in revenues for FY20, reflecting a purchase multiple of ~4x sales.

We understand the software will sit on top of BVS’ Sonata product and be able to siphon data into an easy-to-use reporting tool. We see this as a strong move by BVS for the Sonata product, particularly with increasing pressure on costs disclosure and reporting requirements. This should see BVS achieve a higher share of wealth manager’s technology budgets.

FinoComp is currently setup with a handful of leading UK wealth managers and we expect BVS will leverage its UK sales team to further drive adoption of the FinoComp reporting product. BVS may also further cross-sell the FinoComp software into other verticals such as Funds Administration with some further product investment which we expect over the medium-term.

We update our estimates for the inclusion of FinoComp, with the deal pointing to 1%/2%/3% upgrades to EBITDA for FY20/21/22. We assume some acquisitions costs of c. $200k in FY20E. Our price target moves up marginally to $5.44 on account of a higher EBITDA base arising from the FinoComp acquisition. Valuation still undemanding at 12x EBITDA and ~20% discount to peers.”

DYOR