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Analyst Research Report Snapshot


'Tuck in' acquisition of niche IT recruiter




Equity Development


09 Sep 2013





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Today Matchtech announced that it had acquired Application Services Ltd (trading as Provanis) for £4m in cash for the shares along with assumed debt, subject to standard closing conditions. We believe the transaction is an ideal fit with their existing Connectus (technology) division. Additionally it expands the group's activities abroad, and provides valuable expertise in the niche Enterprise Resource Planning (ERP) recruitment sector. The deal is anticipated to be earnings accretive, as we have upgraded 2014 PBT by 3.4% to £10.4m, and nudged up our target price from 443p to 448p/share. Despite strong recent performance Matchtech shares are still not expensive, on an undemanding forward PER of 12.4x, roughly a 30% discount to its peers.

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