Information technology and software engineering company CI&T (NYSE:CINT) recently revealed that it has acquired a UK-based digital product agency, Somo Global Ltd., for $67 million. The deal is likely to close in the first quarter of 2022.
Shares of the company reacted adversely to the news and declined almost 6% to close at $12.07 on Friday.
Under the terms of the deal, CI&T will pay up to 25% of the buyout amount in the form of Class A Common shares of CI&T, along with an earn-out clause of up to $13 million, subject to future performance.
Post the acquisition, Somo will become a part of CI&T’s Europe, Middle East and Africa(EMEA) operation.
Further, the buyout will enable CI&T to gain access to Somo’s digital capabilities and a wide range of clients spanning industries, including automotive, financial services, utilities and telecom.
The CEO of CI&T, Cesar Gon, said, “Somo and CI&T have a similar culture – people first, innovation-driven and a strong reputation with global brands. Together we will be able to combine the power of a global company with the strength of a strong European player.”
Consensus among analysts is a Strong Buy based on 6 unanimous Buys. The average CI&T stock prediction of $17.50 implies upside potential of 45% from current levels. Shares have declined 33.4% over the past year.
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into CI&T’s performance this quarter.
According to the tool, the CI&T website recorded a 1.44% monthly fall in global visits in December, compared to the same period last year. However, year-to-date, the website traffic has grown 43.81%, compared to the previous year.
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