j2 Global (NASDAQ:JCOM) Should Benefit Quickly from Protus IP Solutions Acquisition

It shouldn't take long for j2 Global (NASDAQ:JCOM) to benefit from their acquisition of Protus IP Solutions, which was announced on Monday.

FBR commented, "This morning, j2 Global announced it has acquired Protus IP Solutions, a privately held Canadian provider of software-as-a-service communication services and solutions that currently has a customer base of more than 500,000 subscribers. The all cash purchase price of approximately $213 million (subject to certain post-closing adjustments) was funded from j2’s cash balance that as of the close of the September quarter totaled $272 million. We note the purchase price represents roughly 3x Protus’ trailing 12 month revenues of roughly $72 million, a fair valuation in our opinion, given the strategic nature of this acquisition as well as the transaction being immediately accretive to pro forma EPS. Strategically speaking this deal makes sense as the synergies between the Protus' flagship MyFax solution and J2's 'bread and butter' fax service are very clear and should lead to some nice cross-selling opportunities over the next 12 to 18 months. With a host of new offerings in its back pocket (voice, document management capabilities) and ability to generate impressive free cash flow, we believe this was the right acquisition at the right time for j2 as the company looks for ways to grow its top-line through higher growth initiatives. We also believe this acquisition was a nice defensive move as it takes out the company's main competitor in the hosted fax market."

FBR maintains a "Market Perform" rating on j2 Global, which closed Monday at $29.92, soaring $1.90, or 6.78 percent. Volume was over three times the daily 3-month average.