STW Comms upgraded on acquisition

Our valuation on advertising and marketing group STW Communications Group (SGN) has been lifted following the group's decision to buy Australia's largest in-store retail marketing company.

The $35.2 million deal for Active Display Group will add around to $100 million to the group's annual revenue from 2014-15 onwards.

In-store marketing is a fragmented but fast growing segment and the purchase will give STW greater cross-selling opportunities.

We have updated our model to account for the acquisition and adjusted our price target on the stock. You can read more about this by clicking here.