From The Press Release

  • Net sales increased by 106% to $ 399m / SEK 3,349.9m (1,624.2m) while organic growth in local currency was 38%
  • Gross profit increased by 84% to SEK 820.0m (446.7m) while organic growth in local currency was 24%
  • Adjusted EBITDA increased by 30% to SEK 240.3m (184.3m). Excluding currency effects and costs for share-based incentive programs, the increase would have been 52%
  • Profit after tax for the quarter amounted to SEK 140.8m (96.4m)

On 17 February 2021, Sinch announced that it had closed an agreement to acquire Inteliquent, the largest independent voice communications provider in the US, for total cash consideration of USD 1,140 million on a cash and debt-free basis

  • Inteliquent powers voice communications for the leading communication service providers and enterprises in North America. The company operates a fully redundant, geodiverse, carrier-grade Tier 1 network that is directly connected to telecom carriers that cover 94 percent of the US population
  • Sinch closed the acquisition of Wavy on February 1 for total cash consideration of BRL 355 million and 1,534,582 new shares in Sinch. The acquisition was financed with a combination of existing cash reserves and debt facilities
  • Wavy is a leading supplier of messaging services in Latin America with a leading position in next-generation conversational messaging. Wavy operates in Brazil, Mexico, Colombia, Peru, Chile, Argentina and Paraguay

The Take

  • The stock is pulling back, making its valuation even more reasonable
  • The company is growing fast and is profitable, giving it the cash it needs to fuel its future acquisition
  • We have increased our stake by 25% on the pullback

Disclaimer

Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.

Disclosures

The author has a position in Sinch AB. The author has no business relationship with any company mentioned in this article and the author is not receiving any form of compensation for this article other than contributions from paying subscribers.

Credits

Photo by Adem AY on Unsplash.