Ann: Appen to Acquire Figure Eight & Launch Capital Raising, page-77

https://www.fnarena.com/index.php/2019/03/12/appen-enhances-scale-with-figure-eight/

Citi upgrades the stock to Buy from Neutral, with a $28.04 target.

Citi calculates that long-term synergy savings of around $14m could equate to around 10% of 2021 earnings estimates. The broker expects the margin to be diluted in 2019 to 17.3% from 19.7% in 2018, and fully recover in 2021.

UBS has a Neutral rating and $24 target.

UBS considers the deal strategically positive but requires further analysis of the numbers before altering forecasts. Initial calculations indicate around -23% dilution to earnings per share in 2019, which reduces to around -8% in 2020.Still, the acquisition makes sense as this is a high-quality, self-serviced platform. Appen was expected to invest in its own annotation tools, but with Figure Eight there is a recurring base of around 60% of 2018 revenue and a relatively low customer churn rate.