Guidance Software Inc. was the biggest mover Wednesday on the LABJ Stock Index after the company said it swung to a profit in the fourth quarter, announced an acquisition and received an analyst’s upgrade.
The Pasadena developer of digital forensics and e-discovery software late Tuesday reported net income of $2.3 million (9 cents a share), compared with a net loss of $446,000 (-2 cents) in the same period a year earlier. Revenue rose 15 percent to $29.9 million.
Guidance said that it would acquire CaseCentral, a private San Francisco developer of cloud-based, case-discovery software used by law firms and corporations. The deal is valued at $17.1 million, with Guidance paying $8.3 million in cash and $8.3 million in stock. It also will assume about $500,000 in debt.
CaseCentral’s owners will have the opportunity to receive a $33 million earn-out based on performance. Guidance said it expects to add about $10 million in revenue from the acquisition in this year alone.
“This acquisition will extend Guidance Software’s market leadership by delivering a complete and integrated platform for the e-discovery needs of corporate and government customers,” said Chief Executive Victor Limongelli in a statement.
The developments prompted analyst Gary Spivak at Noble Financial Group to raise his recommendation on the stock from “hold” to “buy,” with a 12-month price target of $11 a share.
Shares on Wednesday closed up $2.66, or 34 percent, to $10.45 on the Nasdaq.
