Cloud revenue management solutions provider Model N has entered into a definitive agreement to acquire Deloitte’s life sciences pricing and contracting solutions business and underlying technology for $60 million in cash.
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Model N (MODN) expects this acquisition to broaden its portfolio “to better serve a larger segment of the market from pre-commercial to the largest life sciences companies in the world.” The company expects the acquisition to be completed in late December 2020. It does not expect the acquisition to contribute to its 1Q FY21 results.
Model N’s CEO Jason Blessing stated, “Deloitte’s cloud software and expert services solution are purpose built to help companies scale from pre-commercial to billion dollar enterprises. Model N has not historically gone after the pre-commercial segment so this is an exciting addition to our total addressable market.” (See MODN stock analysis on TipRanks)
On Dec. 9, J.P. Morgan analyst Jackson Ader double downgraded Model N to Sell from Buy and lowered the price target to $33 from $48. In conjunction with J.P. Morgan’s 2021 Software Technology outlook, the analyst rebalanced ratings in the sector. Ader downgraded a number of “high multiple stocks” and upgraded “cyclically sensitive” stocks to reflect J.P. Morgan’s outlook for economic expansion beginning in 2Q21.
The rest of the Street is sidelined on the stock, with a Hold analyst consensus based on 1 Buy, 2 Holds and 1 Sell. Shares have risen 4.7% so far in 2020 and the average price target of $37.33 indicates a modest upside potential of 1.7% from current levels.
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