Analysts approve of BrinkÃ¢â‚¬â„¢s spin
LOS ANGELES - Everyone knows what the activist hedge funds have been saying about a spin-off of BrinkÃ¢â‚¬â„¢s Home Security, but what do the industry investment gurus have to say about it?
Imperial Capital Asset ManagementÃ¢â‚¬â€which recently purchased USBX Advisory, the firm founded by John MackÃ¢â‚¬â€weighed in on the BrinkÃ¢â‚¬â„¢s spin-off question in a Feb. 26 report.
In that report, it reiterated its BUY rating for The BrinkÃ¢â‚¬â„¢s Company stock.Ã¢â‚¬Å“We believe this announcement represents a major stock catalyst and we see potential upside beyond our current price target ($87) toward the $100 range, assuming BHS trades at 12x TTM EBITDA, in-line with sector peer Securitas Direct.Ã¢â‚¬Â
The report says that BrinkÃ¢â‚¬â„¢s Home SecurityÃ¢â‚¬â„¢s valuation was restrained by The BrinkÃ¢â‚¬â„¢s CompanyÃ¢â‚¬â„¢s conglomerate structure, although for practical purposes BHS and the armored trucking business were already operating as separate companies Ã¢â‚¬Å“with minimal business and managerial overlap Ã¢â‚¬Â¦ In our view, the expected benefits of the planned spin-off far outweigh the operational and financial considerations as independent public companies.Ã¢â‚¬Â
Further, BHSÃ¢â‚¬â„¢s Ã¢â‚¬Å“solid operating performance, robust brand value, consistent subscriber growth and one of the lowest attrition rates in the industryÃ¢â‚¬Â means BHS Ã¢â‚¬Å“could earn a premium multiple.Ã¢â‚¬Â Imperial also notes that two major alarm companies, HSM and Securitas Direct, have been valued by acquirers at 12x TTM EBITDA over the past year. SSN