Broker snap: Intelenet purchase to boost Serco

31st May 2011 11:45

After Serco's recent share price underperformance, Prime Markets thinks that Tuesday's acquisition of Intelenet should "safely propel" shares higher.The support service provider has bought India-based business process outsourcing firm Intelent for up to £385m. "The acquisition is in line with Serco's strategy which is focused on driving organic growth, supplemented by strategic acquisitions of skills and capabilities to enter new markets and sectors where it sees strong opportunities to enhance growth and margins," said Prime Markets' head of dealing Richard Curr.Curr notes that Serco's solid performance from existing markets combined with the added exposure to emerging market growth should push the share price through the "all-important" 200-day moving average of 573p.The broker's target price for the stock is 590p, and a 'buy' rating is maintained. ---BC