Another Datalink acquisition
Eden Prairie-based Datalink was busy last week. On Monday, it announced an agreement to acquire California-based Bear Data Systems for $18.5 million in cash and stock. Third-quarter earnings came out Tuesday.
Datalink has made other acquisitions since 2009, aiming for $1 billion in revenues.
With the Bear acquisition, Datalink will add $130-$145 million in annual revenue. Analysts estimate Datalink will bring in $622 million in revenue at the end of 2014.
Eric Martinuzzi covers Datalink for Lake Street Capital Markets. He looked at Datalink's cash reserves and sees capacity for more acquisitions. "Datalink had net cash of $61 million exiting Q2, so we estimate pro forma net cash at $44 million." Martinuzzi wrote in a research note. "This leaves plenty of dry powder for other acquisitions without doing an equity raise."
SPS Commerce has a G'day with deal
Earlier this month SPS Commerce, a cloud-based supply chain management software company, also announced an acquisition that expands its geographic reach. On Oct. 12, it purchased the assets of Leadtec Systems Australia for $14.9 million in cash and stock. And on Thursday Minneapolis-based SPS announced third-quarter results that modestly beat analysts' expectations.
Analysts were generally pleased with the Leadtec announcement. Michael Huang of Needham & Company wrote: "We're fans of the Leadtec acquisition given minimal integration risks." Canaccord Genuity analyst Richard Davis wrote of the deal "SPSC's Leadtec acquisition makes great sense; entering a new market, in this case Australia." Huang and Davis had two of the eight "buys" on SPS verses one "sell."
Patrick Kennedy
