According to Bloomberg this morning, an analyst at Goldman Sachs also thinks IACI acquired ValueClick's (VCLK) O&O assets at a very good price, similar to what we mentioned in our previous post. That analyst expects those assets to generate $127MM in revenues, which is much lower than our $139MM estimate. Then again, the sell-side folks are supposed to come out with estimates that are easily beatable, in order for the stock to go up. We try to be a bit more objective, which in and of itself is ... subjective! The analyst thinks those assets are worth around $140MM. Assuming a 22% EBITDA margin (as we did with our estimate), we could say that the analyst's valuation is 5x EBITDA. We think that sooner or later BCOR will choose the same path as VCLK: sell the search and websites segment and focus on growing the remaining businesses. But the BCOR stock has gone up too much. In fact, we said that BCOR's Infospace segment will become attractive to a potential buyer at around 5x our 2014 EBITDA estimate (possibly a multiple similar to the one the Goldman Sach's analyst applied to VCLK's O&O), allowing the buyer to bid for it at 6x EBITDA, or approx. $520MM. Overall, the price offered by IACI and the price accepted by VCLK, we believe, support our valuation assumptions for BCOR. Link to the Bloomberg article is below:
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