j2 Global Inc.
), a leading provider of unified messaging capabilities, recently
acquired a U.K.-based Email Security and Management company
called EPA Cloud. The details of the acquisition remain
The company exited the second quarter of 2013 with a strong cash
position of $352.9 million and record high revenues of $141.4
million, up 58% year over year, easily beating both the top and
the bottom line of the Zacks Consensus Estimate.
Hence, we believe that a solid cash position coupled with a low
debt-to-capitalization ratio of 0.28, has induced the company to
pursue this acquisition. At present, j2 Global commands
approximately 30% of the world's cloud-based digital faxing
Moreover, the company expects to benefit from increasing
demand for cloud based, value-added communication, messaging and
data backup services. As a result, the company has also raised
its outlook for fiscal 2013.
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j2 Global primarily depends on inorganic growth for expansion.
Last year, the company made six acquisitions related to
cloud-based services. The acquisitions were mainly across Europe
and Australia with a total capital spending of nearly $198
million. The company executed four more buyouts early this year.
The aggressive buy-out strategy of the company will consolidate
its global leading position in the virtual PBX market.
Other Stocks to Consider
j2 Global currently has a Zacks Rank #3 (Hold). The other stocks
in the Internet/Application software industry that are currently
performing well include
Constant Contact, Inc.
). All three currently have a Zacks Rank #2 (Buy).