Q: Propel looks to me like a good company to go private or be taken over by another such as gsy. What are your thoughts on this. Thanks John
5i Research Answer:
We think the thesis makes sense, up to a point. PRL has been public less than three years, so may want to maintain its shares (as currency) for its own deals. But, the valuation is low, and insiders own 28%. At some point, they may want to keep the cash flow to themselves rather than pay a 2.2% dividend to the public. It is a fairly niche business, and competitors such as GSY also do not get a high valuation multiple, so this potentially limits a takeover possibility.