Report update on Schaffner Holding AG by Research Dynamics: Trenco acquisition (News mit Zusatzmaterial)
DGAP-News: Research Dynamics / Schlagwort(e): Research Update
Report update on Schaffner Holding AG by Research Dynamics: Trenco
acquisition (News mit Zusatzmaterial)
02.04.2014 / 07:00
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Schaffner strengthens its position in the US with the acquisition of Trenco
Acquisition details
Schaffner announced an acquisition of three subsidiaries of Transformer
Holding LLC, namely Transformer Engineering LLC, Magnetics Technologies LLC
and Transformer Real Estate LLC (together known as Trenco) for CHF9mn
(approximately USD10mn). Trenco is a US based company that develops and
manufactures customized power magnetics solutions. It reported revenues of
CHF12mn with EBITDA margin in mid-to-high single digits translating to a
trailing price-to-sales multiple of 0.75x. Schaffner will pay USD9.6mn
upfront, with the rest being an earn-out and will finance the deal through
extension of current credit lines. The acquisition confirms Schaffner's
commitment towards its Buy-and-Build strategy for the Power Magnetics
division.
Changes to the model
We have increased our FY14 revenue forecast to CHF222mn (previously
CHF210mn, company guidance CHF220mn). Our FY14 EBIT is now CHF16mn compared
to CHF15mn earlier, with group EBIT margin of 7.4% due to one-time
corporate costs of CHF0.5mn. Consequently, we expect the group's FY14
diluted EPS to be CHF19.8 from CHF18 in our last update.
Our view
The acquisition gives Schaffner access to Trenco's clients and helps it
strengthen its position in the strategic growth markets such as rail
technology, energy-efficient drive systems and renewable energy. 50% of
Trenco's products are complimentary to Schaffner's product line, and the
combined entity now offers the largest portfolio of power quality solutions
w/w. The acquisition also offers the group an opportunity to leverage its
global sales and distribution network to market Trenco's products.
The transaction will help Schaffner strengthen its presence in the US
market and give it access to Trenco's products that are US regulatory
approved and ready for marketing. Looking at the deal multiples, at 0.75x
2013 revenues, the acquisition is at a discount to what Schaffner's product
peers trade at (1.46x). After the acquisition, Schaffner becomes the fourth
largest company in the Power Magnetics space and gets a boost towards
achieving its target of becoming the second largest in the world. We feel
that Schaffner trading at a discount to its peers (25%, 31% and 25% on
EV/EBITDA, EV/EBIT and P/E measures respectively) is unwarranted given its
focused growth strategy and expanding margins.
Ende der Corporate News
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Zusatzmaterial zur Meldung:
Dokument: http://n.equitystory.com/c/fncls.ssp?u=OXUHLJUUWY
Dokumenttitel: Schaffner_Update_Research Dynamics_2 Apr 14
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02.04.2014 Veröffentlichung einer Corporate News/Finanznachricht,
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