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Velti plc Message Board

  • inetvestor777 inetvestor777 Jan 30, 2013 10:39 PM Flag

    $870 mln value from Merger & Acquisition financial analyst calculation

    Velti fetches $870 mln value from Merger & Acquisition financial analyst calculations. To derive valuations in internet, technology, mobile and related businesses is hard given there is no gold standard. Just look at Facebook for example. Its current market capital is around $68 billion. It will have annual sales of $7 billion. So based on sales multiples it commands almost 9x. No other things considered like earnings, debt, patents, litigations and other derivables. Now lets get back to Velti. Company should have sales over $300 mln in 2013 so just based on it if I give the same multiple as FB then I conclude value of $2.7 bln
    But I am very conservative when it comes to deriving company valuations as I factor every aspect of the business fundamentals including industry multiples, comparison to competitors valuations and what not. My most conservative estimate for current valuation is $870 mln so obviously current $270 mln today's value on stock market makes this pretty attractive for companies looking to acquire.
    If this company was private the offers well could be like Instagram that received $1 bln from Facebook despite it having barely any revenues at the time of acquisition.
    I suspect there are some private equity luring to take this private by making a decent offer but more likely scenario is for companies like Google or Facebook or Millenia Media to grab this opportunity to buyout at attractive valuation. To throw $1 bln is pocket change for companies like FB, GOOG, AOL or even AAPL to whom this could be very strategic & complimentary investment.

    Sentiment: Buy

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VELT
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