Q: I realize that you are not much of a fan of DCBO these days given your preference for DTOL and that you removed it from your growth profile. But I'm wondering if this company might be looked at as a potential takeover candidate. Three points to consider:
1. There have been recent articles indicating that the next 18 months could see a real pickup in M&A activity within the Canadian software sector;
2. Following recent earnings, analysts revised their targets for DCBO downwards. Notwithstanding this, the average target is still $72.17, almost 70% higher than our current share price; and
3. Most significantly, two weeks ago, Warburg Pincus LLC anted up over $5.4M to purchase 118K shares (@$45.49) and they now own 12% of the company.
As always, would appreciate your viewpoint.
1. There have been recent articles indicating that the next 18 months could see a real pickup in M&A activity within the Canadian software sector;
2. Following recent earnings, analysts revised their targets for DCBO downwards. Notwithstanding this, the average target is still $72.17, almost 70% higher than our current share price; and
3. Most significantly, two weeks ago, Warburg Pincus LLC anted up over $5.4M to purchase 118K shares (@$45.49) and they now own 12% of the company.
As always, would appreciate your viewpoint.
5i Research Answer:
Certainly it is a possibility. We are not sure the company will have enjoyed its fairly brief...