LiveDeal, Inc. Closing in on $100 Million in Revenue and Sustained Profitability

NEW YORK, NY--(Marketwired - June 24, 2015) - LiveDeal, Inc. (NASDAQ: LIVE) announced this week that it has already identified the first target in its new acquisition strategy and considering the timing of the release, it is likely that the company is nearing the closing of the transaction. LiveDeal management noted that the yet-to-be-revealed company recorded $60 million in revenue and $5 million in profit, according to its 2014 unaudited financial statements.

Based on its fourth quarter 2014 revenue of $8 million, LiveDeal is likely operating at an estimated annual revenue run rate of $32 million for 2015. Add in the targeted company’s financials, and virtually overnight, LiveDeal becomes a company with nearly $100 million in total revenue and sustained profitability in 2015 and beyond.

It should be noted that the company’s market cap prior to the announcement was around $45 million. Most growth stocks, regardless of industry affiliation, tend to trade at price/revenue multiples of 2-3x current year projected sales. Therefore, it is reasonable to assume that LiveDeal’s market cap, revised to include the acquisition, would be roughly $200-300 million once integrated, versus the current, paltry $45 million valuation.

This new multiple represents a future market cap that is 4-6 times higher than the one presently afforded LiveDeal. Furthermore, once fully integrated, reliable net income and earnings per share forecasts can be initiated and could provide yet another rise in valuation.

To take advantage of a favorable debt and interest rate market and eliminate shareholder dilution from such a transaction, investors can expect the company to utilize traditional debt financing in this transaction. Moreover, with two successful M&A transactions to its credit (Modern Everyday and this pending deal), it is likely that LiveDeal management will continue to add even larger, earnings positive growth companies to its stable, which should take the stock to new heights.

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