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Verra Mobility's Pagatelia Buyout to Aid Business in Europe

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Verra Mobility Corporation (VRRM - Free Report) announced that it signed an agreement to acquire the Spain-based company, Pagatelia. Financial terms of the transaction have been kept under wraps.
 
The buyout news seemed to have lifted market sentiments, as evident from roughly 1.36% increase in the company’s share price yesterday.

Notably, Pagatelia is a renowned European company engaged in providing electronic tolling solutions. Operating in Italy, Spain, France and Portugal, the firm provides services mainly to car manufacturers, individual drivers, highway and parking operators, and financial institutions.

Inside the Headlines

Verra Mobility will integrate the acquired assets with its Commercial Services segment, strengthening its offerings (related to parking and tolling) to fleet and rental car companies in Europe. It also pointed out that the buyout will help it benefit from an expanding global tolling market.

In second-quarter 2019, the Commercial Services segment accounted for 62.1% of Verra Mobility’s revenues. On a year-over-year basis, the segment’s revenues represented 13.9% growth from the year-ago quarter.

Subject to the fulfillment of customary closing conditions, the company anticipates the transaction to be completed by the end of October.

Growth Initiatives

We believe that the above-mentioned transaction is consistent with Verra Mobility’s policy of gaining access to new customers, regions and product lines through acquisitions, partnerships and other means.

In April 2018, the company acquired Euro Parking Collection plc, thereby strengthening operations in European markets. Also, Verra Mobility collaborated with APRR to provide services related to toll management throughout France.

Zacks Rank & Key Picks

With a market capitalization of nearly $2.2 billion, the company currently carries a Zacks Rank #3 (Hold). In the past three months, its share price has increased 3.6% against the industry’s decline of 0.7%.

In the past 60 days, the Zacks Consensus Estimate for Verra Mobility’s earnings has been lowered by 1.2% to 85 cents for 2019 and declined 1% to 95 cents for 2020.

VERRA MOBILITY CORP Price and Consensus

 

VERRA MOBILITY CORP Price and Consensus

VERRA MOBILITY CORP price-consensus-chart | VERRA MOBILITY CORP Quote

Some better-ranked stocks in the Zacks Industrial Products sector are Brady Corporation (BRC - Free Report) , Lakeland Industries, Inc (LAKE - Free Report) and Cintas Corporation (CTAS - Free Report) . All these stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Current-year earnings estimates for these companies have improved in the past 60 days. Also, the positive average earnings surprise for the last four quarters was 9.68% for Brady, 325.89% for Lakeland Industries and 6.26% for Cintas.

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