FBR Capital Markets Comments On j2 Global's Offer To Acquire Carbonite

In a report published Wednesday, FBR Capital Markets analyst Daniel H. Ives reiterated a Market Perform rating and $60.00 price target on j2 Global (NASDAQ: JCOM).

In the report, FBR Capital Markets noted, “j2's management team has done a commendable job of picking the right spaces that make sense for the company to expand its growth tentacles, with this morning's Carbonite proposed acquisition as another step in the right direction in our opinion. While this potential transaction is not a total shock to the Street given the existing relationship between j2 and Carbonite, the key question now will be Carbonite's move in this game of high stakes poker as the company has experienced execution issues and business challenges over the past few years.

"We ultimately believe the $15 bid is a fair price (representing approximately 2.5x on an EV/Sales basis given FY15 Street estimates) and should be a move applauded by j2 investors as it speaks to a company looking to expand growth opportunities given inherent challenges in its core fax business. As we have seen play out over the last decade, M&A is a crucial ingredient in j2's recipe for success and Carbonite would be another chapter in that book. While this would be a relatively large acquisition for j2 to integrate, we have confidence in the company's ability to manage this process with minimal hiccups given the synergistic nature of this deal. We also note that we would be surprised to see other bidders enter the fray. We maintain our Market Perform rating.”

j2 Global closed on Tuesday at $56.97.