By Josh Boak
The all-stock deal between the two New York-based companies could be worth roughly $401 million, based on Evercore's shares closing Friday at $50.13. Evercore plans to issue the equivalent of up to 8 million shares to purchase ISI and also acquire the remaining 40% of its own equities division not currently under the investment bank's control.
About 70% of the shares involved would be paid out over five years based on performance target. Evercore says it expects to close the deal in the final three months of 2014.
The combined business would have generated $230 million in revenue over the 12 months ended June 30.
Now let's look at TheStreet Ratings' take on some of these stocks.
"We rate EVERCORE PARTNERS INC (EVR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- EVR's revenue growth has slightly outpaced the industry average of 2.9%. Since the same quarter one year prior, revenues slightly increased by 5.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- EVERCORE PARTNERS INC has improved earnings per share by 34.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EVERCORE PARTNERS INC increased its bottom line by earning $1.41 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($2.57 versus $1.41).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 47.7% when compared to the same quarter one year prior, rising from $16.43 million to $24.27 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The gross profit margin for EVERCORE PARTNERS INC is rather low; currently it is at 23.26%. Regardless of EVR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.94% trails the industry average.
- You can view the full analysis from the report here: EVR Ratings Report