NEW YORK (TheStreet) -- News Crop (NWSA - Get Report) stock is up by 0.12% to $12.95 in afternoon trading on Wednesday, after the company agreed to acquire Unruly, a video distribution platform, for $90 million.
Unruly, which also tracks video sharing and views, could also receive an additional $86 million if it meets certain performance objectives.
News Corp will keep Unruly as a separate unit led by its three co-founders, who will report to News UK CEO Rebekah Brooks.
Unruly's products will be available to News Corp advertising and agency partners over the next few months.
"The acquisition will serve as a catalyst for our brands, helping to extend our expertise in the digital and mobile video area," News Corp CEO Robert Thomson said in a statement. "Unruly complements our traditional editorial and commercial expertise with contemporary insight into how people read, watch, buy and sell in the digital era."
The deal is expected to close by the end of September.
Separately, TheStreet Ratings team rates NEWS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NEWS CORP (NWSA) 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 largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NWSA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, NWSA has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 152.94% to $129.00 million when compared to the same quarter last year. In addition, NEWS CORP has also vastly surpassed the industry average cash flow growth rate of 7.47%.
- 42.60% is the gross profit margin for NEWS CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -17.65% is in-line with the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 3007.7% when compared to the same quarter one year ago, falling from $13.00 million to -$378.00 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Media industry and the overall market, NEWS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: NWSA