Artificial intelligence tech company Veritone, Inc. (VERI) announced that it has signed an agreement to acquire PandoLogic, Inc. for a total consideration of $150 million in cash and Veritone stock, which is about three times the latter’s expected 2021 GAAP revenues. PandoLogic is an AI-enabled talent acquisition platform.
The acquisition, which is likely to close in the September quarter of this year, is expected to be immediately accretive to Veritone’s revenues by $50 million in SaaS and related GAAP revenues on a pro forma 2021 basis.
This strategic move is expected to help Veritone expand its reach to PandoLogic’s wide customer base, including many Fortune 100 companies. (See Veritone stock chart on TipRanks)
The Chairman and CEO of Veritone, Chad Steelberg, said, “This transformative acquisition builds on the strength of our organic growth, expands our addressable market with a new diversified revenue stream, and unlocks new growth and development opportunities as we integrate the platforms.”
Two months ago, Stifel Nicolaus analyst Brad Reback reiterated a Hold rating on the stock with a price target of $26, which implies 27.1% upside potential.
Reback said, “We continue to believe that ongoing share capture across its core Media and Entertainment market and growth in the application of aiWARE across non-traditional use cases, particularly within the GLC and Energy Utility verticals, will allow the company to sustain more than 20% year-over-year growth through the medium term.”
Consensus among analysts is a Strong Buy based on 4 Buys and 1 Hold. The average Veritone price target of $35.2 implies 72.4% upside potential.