Assurance Global Services Raises Offer to Acquire CTG to $7.00 Per Share in Cash

Earlier this morning, Assurance Global Services (AGS) filed a 13-D/A that included a letter to the Board of Directors in which AGS presented a revised non-binding proposal to acquire CTG, Inc. (CTG) for $7.00 per share in cash. The proposed acquisition price represents a 33% premium to the prior day’s close and values CTG at approximately 9.1x and 7.5x our FY ’19 and FY ’20 adjusted EBITDA estimates, respectively.

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K. Liu's Week in Review

Depending on news flow next week, this may well be our last weekly recap for 2019, so we wish you all a safe and happy holiday season! Last week, media reports indicated that LogMeIn (LOGM) was set to be acquired by affiliates of private equity firm Francisco Partners and Elliott Management in a deal valued at over $4.0 billion.

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Initiating Coverage of CTG

We are initiating coverage of CTG, Inc. (CTG) with a price target of $8.00, representing a FY ’20 EV/EBITDA multiple of 8x. We believe the long-established provider of IT staffing and solutions services is effecting a strategic transition in its business by de-emphasizing lower margin staffing opportunities and focusing instead on higher margin, higher recurring revenue engagements part and parcel to its solutions business.

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