
An analyst with Jefferies & Co., Joseph Vafi, has done a buyout analysis on Perot Systems Corp. (NYSE:PER), a computer consulting firm. His conclusion: this would be an ideal candidate for a private equity firm.
He thinks the takeout value is about $20 to $21 per share (the current stock price is $16.20).
True, this is no guarantee a deal will get done, but Vafi does think the stock is cheap. After all, Perot Systems has been growing nicely -- there was a 14% increase in sales during the prior quarter. What's more, the company is selling at about 0.73X revenues, which is comparatively low.
Also, the cash flow is reliable and the customer contracts are fairly secure and long-term.
Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.