Investment and Company Research
MICROCAP HOT TOPICS
LiveDeal Leveraging its Successful Acquisition History
to Initiate New M&A Strategy
Following the wildly successful acquisition and integration of Modern Everyday, Inc., LiveDeal Inc. (NASDAQ – LIVE - $3.26 – Spec Buy) recently announced that it has initiated a new acquisition strategy designed to leverage the success of the August 2014 purchase and its current restaurant deal segment.
Since the closing of the Modern Everyday deal late last year, the Company has enjoyed substantial revenue growth and behind-the-scenes synergy via the Company’s e-commerce platform. In fact, for the fourth quarter of 2014, record revenue of $8 million was up 1200% year-over-year and was largely boosted by Modern Everyday sales. Going forward, management expects continued meaningful top-line growth from this subsidiary and that the execution of another revenue-generating acquisition could generate positive future results.
Judging by past success, a new acquisition in the technology or retail arena could take the Company to a new level just due to size alone, if the target(s) produces meaningful revenue. Plus, since management has demonstrated an unheralded ability to integrate seemingly disparate business models into a high-growth, high gross margin company, potential operating leverage and cross-sale opportunities from a new acquisition could have a very positive impact on LiveDeal’s valuation.
It should be noted that the Company’s high profile core business, just like the Modern Everyday line, continues to generate solid sales growth for LiveDeal and it remains leadership’s top focus. The Company’s flourishing segment, livedeal.com, is a geo-location based mobile marketing platform that enables restaurants to publish "real-time" and "instant offers" to nearby consumers and offers deals across the country.
Believing that its stock is undervalued at present, management was quoted in its press release saying that it may consider using traditional debt financing to execute an acquisition versus an equity-based or equity-heavy deal. This is likely welcome news to current investors as management can take advantage of record low interest rates, while shareholders would not be subject to dilution. Furthermore, the Company’s current balance sheet appears to have enough leverage to support a debt financing.
For more information, refer to our previous sponsored LIVE Reports, Updates and Hot Topic Articles by visiting http://www.GoldmanResearch.com/
Senior Analyst: Robert Goldman
Rob Goldman founded Goldman Small Cap Research in 2009 and has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.
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