Procore to Snap up Levelset for $500M; Street Says Buy

Construction management software provider Procore Technologies, Inc. (PCOR) recently announced that it has signed a definitive agreement to acquire construction software company Levelset for $500 million. The transaction is likely to close in the fourth quarter of this year.

Following the news, shares of the company appreciated marginally to close at $90.64 in extended trade on Wednesday.

With this buyout, Procore will add lien rights management to its platform. This, in turn, is likely to make the process of business compliance easier and shorter for its users, making the payment process more seamless.

Notably, the consideration of $500 million is split up into $425 million in cash and $75 million in Procore common stock.

The CEO of Procore, Tooey Courtemanche, said, “Levelset helps the construction industry get paid faster, and their offering will be a perfect addition to the Procore platform. This acquisition will also give Procore access to industry data, including payments and compliance activity, allowing us to deliver valuable risk intelligence to our customers, and to develop innovative financial products.” (See Procore stock chart on TipRanks)

Recently, KeyBanc analyst Jason Celino reiterated a Buy rating on the stock. The analyst, however, raised the price target from $105 to $115, which implies upside potential of 26.9% from current levels.

Consensus among analysts is a Strong Buy based on 7 Buys and 2 Holds. The average Procore price target of $109 implies upside potential of 20.3% from current levels. Shares have gained 3% over the past year.