Craig-Hallum downgrades PFSweb to Hold on sale to GXO at $7.50 per share

As previously reported, Craig-Hallum downgraded PFSweb (PFSW) to Hold from Buy with a price target of $7.50, down from $11, after the company formally announced a definitive agreement to be acquired by GXO (GXO) for $7.50/share. GXO has always been on the firm’s short list of potential buyers and it believes the deal makes strategic sense. While the takeout multiple is below the low end of its estimated range, Craig-Hallum recognizes the fact that uncertain market conditions justify a somewhat lower multiple than what was common in a lower interest rate environment. Since the firm believes the lengthy process has included both private equity and international strategic interest, it thinks an over the top bid is unlikely and expects the deal to close in Q4.