AutoInfo Inc fka AUTO

[leftope]

Shareholders will get to vote on the acquisition. It's likely to go through but shareholders should be very unhappy, encouraging large shareholders to push for a higher price or to vote against the merger.

For companies in the industry with >100mm annual revenues, average acquisitions since 2008 have been over 9x EV/EBITDA. The Autoinfo acquisition is priced at 6x, even though it has ~300mm in annual revenues. Think about it, should a fast growing company with solid earnings be sold for less than a 10 P/E? NO.

There are scale advantages in the industry, so larger companies are valued higher, but even the smallest firms have average acquisition prices above 7x EV/EBITDA.

Enterprise value is about 10.6mm more than the market cap, and EBITDA for the trailing twelve months is about 7.8mm.

Current holders may have decent profits now, but we are getting a really raw deal on this.