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NEW YORK (TheStreet) -- Sabre (SABR) - Get Sabre Corp. Report stock is dropping by 4.81% to $28.47 on heavy trading volume on Tuesday afternoon, after the company announced today that it is buying the Trust Group of Companies.

Sabre, a technology solutions company based in Southlake, TX, will buy the hospitality distribution solutions company for $154 million. Sabre is purchasing the Trust Group from Battery Ventures, an investment firm. 

"Acquiring the Trust Group is consistent with our stated goal of building on Sabre Hospitality Solutions' global leadership position, and this combination will enable us to grow faster," CEO Tom Klein said in a statement. "The Trust Group is one of the industry's most respected brands, and our customers will benefit from our combined expertise and focus on innovation."

The acquisition is projected to add $40 million to Sabre's 2016 revenue, the company said.

So far today, 2.32 million shares of Sabre have traded, versus its 30-day average of 1.99 million shares.

TheStreet Recommends

Separately, TheStreet Ratings team rates SABRE CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate SABRE CORP (SABR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 27.0%. Since the same quarter one year prior, revenues rose by 16.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SABRE CORP reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SABRE CORP turned its bottom line around by earning $0.40 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($1.09 versus $0.40).
  • Powered by its strong earnings growth of 193.33% and other important driving factors, this stock has surged by 60.48% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the IT Services industry and the overall market, SABRE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The debt-to-equity ratio is very high at 6.81 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.48, which clearly demonstrates the inability to cover short-term cash needs.
  • You can view the full analysis from the report here: SABR

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.