By Senad Karaahmetovic
Shares of Everbridge (NASDAQ:EVBG) are up about 17% on a report that the software company is “exploring strategic options,” with one of them including a potential sale.
The company has hired external advisers as it assesses its options, which include a sale to industrial companies or private equity firms, Bloomberg News reported.
A Raymond James analyst is not surprised given that the company’s high gross margin recurring revenue base “could be attractive to potential strategic suitors.”
Although the analyst is positive about the possible M&A deal for “one of the most likely takeout candidates in our coverage universe,” he admits the timing of the news “is a bit surprising” given a new CEO has been in place since last month.
“We suspect that a buyer could emerge from either a financial or strategic nature, especially given private equity ownership of several competitors,” he added.
Similarly, a Stifel analyst added:
“We believe a potential sale of Everbridge would the narrative we have recently written about, that M&A is alive and well in software, and current multiples present a very attractive opportunity for potential buyers. We anticipate further news reports or a direct response from the company in the near future (we have no knowledge of any impending M&A activities).”
Everbridge shares are down almost 50% YTD.