PIC.L Share News (PIC)

Broker KBC Peel Hunt did not find much to get excited about in the interim results from set-top box maker Pace but it likes the look of the acquisition of 2Wire, the US network router firm."The overriding story today is the acquisition of 2Wire, for a net $420m, which could add c30% to operating profit when synergies fully achieved, mid-FY2011 [fiscal 2011]. Our initial estimates suggest EPS rising from 23p (consensus) to around 27-30p on a run-rate basis coming out of FY2011, putting the stock on just 6-7x PER [price/earnings ratio]," KBC analyst Alex Jarvis suggests."Acquisition is subject to shareholder approval and debt facilities, but we see the move as strongly positive for the shares, particularly as concerns over growth paths were weighing on the share price. An opportunity to repeat the success of the Philips acquisition should be well received; it looks like a good deal and strategic fit, with exposure to fast growing markets (c17% CAGR [compound annual growth rate])," Jarvis adds.