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Investing.com - Raymond (NSE:RYMD) James downgraded MeridianLink (NYSE:MLNK) from Outperform to Market Perform following the company’s agreement to be acquired by Centerbridge. The stock, which InvestingPro data shows has surged 24% in the past week, currently trades near $19.78.
The acquisition deal, valued at approximately $2 billion or $20 per share, represents a 26% premium to MeridianLink’s previous closing price. The transaction values the company at roughly 13 times Raymond James’ 2026 estimated EBITDA and 15 times estimated unlevered free cash flow. According to InvestingPro analysis, the company maintains strong liquidity with a current ratio of 2.22 and has been actively buying back shares.
Raymond James cited the high likelihood of the deal proceeding as a key factor in its downgrade decision, noting that shareholders controlling 55% of voting power already support the acquisition. The deal is expected to close in the second half of 2025.
The absence of a go-shop provision and a $48 million break-up fee were identified as significant obstacles to any superior offers emerging for the company.
Raymond James indicated limited potential upside for investors without a higher bid, leading to the Market Perform rating that reflects the firm’s view that the stock will likely trade in line with the agreed acquisition price.
In other recent news, MeridianLink Inc. reported its first-quarter 2025 earnings, with revenue reaching $81.5 million, slightly exceeding the forecasted $81.34 million. However, the company’s earnings per share (EPS) fell short of expectations, coming in at $0.09 compared to the anticipated $0.16. MeridianLink has also entered into a definitive agreement to be acquired by Centerbridge Partners in an all-cash transaction valued at approximately $2 billion. Under the terms of this agreement, shareholders will receive $20.00 per share, a 26% premium over the previous closing price. Following this acquisition news, Stifel raised its price target for MeridianLink from $18.00 to $20.00, maintaining a Hold rating. Additionally, MeridianLink announced the appointment of Denise Cox as its new Chief Customer Officer. Cox brings over 20 years of experience in customer-facing roles at various technology companies. These developments reflect significant changes within MeridianLink, impacting both its leadership and financial outlook.
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