GB Group to buy PCA

Tuesday, May 09 2017 by

GBG have announced a £73m purchase of the private PCA company. Can someone please explain why GBG would want to buy a turnover of £12m and profit of £2m for £73m.

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GB Group plc (GBG) is a global specialist in identity data intelligence. Its segments include Identity Proofing division and Identity Solutions division. The Identity Proofing division provides Identification (ID) Verification, ID Employ and Comply services and ID Fraud and Risk Management Services. It also includes the operations of ID Scan Biometrics Ltd, a provider of software that automates on-boarding of customers and employees by simplifying the identity verification and data capture process. Its Identity Solutions Division provides ID Registration, ID Engage, and ID Trace and Investigate services. The Company helps organizations make decisions about the customers they serve and the people they employ. It provides various business solutions that are focused on informing decisions about customers or employees in areas, such as employing people, registering identities, verifying identities, fighting fraud and locating people. Its products include GBG ID3global and GBG Datacare. more »

LSE Price
560p
Change
-1.8%
Mkt Cap (£m)
1,083
P/E (fwd)
30.9
Yield (fwd)
0.6



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1 Post on this Thread show/hide all

Ramridge 9th May '17 1 of 1
1

I looked at this acquisition this morning and came to similar conclusions that they are paying top money. I don't have the figures with me ( soaking up the sun in my back garden) but on both EV/ebitda and multiple of net profit, it was expensive. I think they are relying a lot on synergies to justify the high price. Not comfortable with this as it jacks up the execution risk.

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