Market News

Everbridge Inks Deal To Acquire xMatters For $240M; Street Is Bullish

Everbridge, a software company, has agreed to snap up xMatters, a service reliability platform, in a cash-and-stock deal worth $240 million, to enhance services for clients.

Everbridge (EVBG) CEO David Meredith said, “Everbridge provides the leading CEM platform for enabling an enterprise-wide, common operating environment for organizations to manage all digital and physical incidents across a single pane of glass. The addition of xMatters enhances our CEM for Digital offering within our broader, integrated solution suite, increasing the ROI for our CEM customers related to use cases for IT Service Operations, Cybersecurity and DevOps incident response.”

The deal, which awaits regulatory approval, is anticipated to close by the end of the second quarter.

Per the terms of the deal, Everbridge will pay 66.7% in cash and 33.3% in stock for all of the outstanding equity of xMatters. Upon the closure of the deal, the acquisition is expected to contribute around $9-$11 million to revenue in 2021, including the impact of purchase accounting and related deferred revenue.

The acquisition is likely to impact the company’s adjusted EBITDA in 2021 minimally, and be accretive to its adjusted EBITDA in 2022. (See Everbridge stock analysis on TipRanks)

Following the deal, Needham analyst Scott Berg reiterated a Buy rating and the price target of $175 (37.4% upside potential) on the stock.

Berg commented, “While the acquisition is unsurprising on the surface given EVBG’s acquisitive history, it appears it will be highly accretive over the intermediate term.”

The consensus rating among analysts is a Strong Buy based on 7 Buys versus 1 Hold. The average analyst price target stands at $171.67 and implies upside potential of 34.8% to current levels. Shares have gained 30.2% over the past year.

What’s more, TipRanks data shows that financial blogger opinions are 85% Bullish on Everbridge, compared to a sector average of 69%.

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