Baird believes the probability of ABCO being acquired has “increased considerably in recent days, given reported interest from multi strategic bidders.”
Despite a takeover catalyst, the firm sees the downside risk of a no-deal scenario as limited, citing a strong rally of Health IT peers and Elliot Associates involvement in the company that includes a 8.3 percent stake in the company as of March 2.
Baird upgraded the stock to Outperform and raised its price target to $53 from $50.
"Multiple unsubstantiated reports from last week indicate ABCO has attracted interest from a number of parties, including EQT, Pamplona Capital, and EVH. Additionally, it appears ABCO will sell its healthcare and education businesses separately."
Analysts believe the takeout has a higher than 50 percent probability around the $55 price level and a 15 percent possibility above $60. The possibility of no deal was assumed at 35 percent.
Shares were up nearly 5 percent on Monday following the upgrade.
Latest Ratings for ABCO
|Mar 2017||SunTrust Robinson Humphrey||Downgrades||Buy||Hold|
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