After more than a decade as a public company, Vertrue
Vertrue started out designing traditional membership programs for companies like Citigroup
All this dealmaking has boosted revenues. From fiscal years 2003 to 2006, revenues increased 44% to $658.9 million, while net income grew 36% to $32.7 million.
Despite all the dealmaking, Vertrue gets nearly 80% of its revenues from its membership business, which grew 6% in the fiscal second quarter.
The personals business is also facing headwinds from the likes of IAC/InterActiveCorp's
The proposed buyout deal does include a "go shop" provision, meaning Vertrue can still seek out strategic bidders. Might there be a higher bid? I think the chances of such a hookup are slim. The deadline for the provision is April 16, leaving little time to negotiate another deal.
At seven times EBITDA (earnings before interest, taxes, depreciation, and amortization), the deal's valuation is also reasonable. In the recent $1.7 billion buyout of Catalina Marketing
As in many going-private transactions, shareholders may seek to block the deal with litigation. That could add a buck or so per share to the final price tag, but it's really not enough to jump into the stock right now.