EMAK SpA – Follow up

Yesterday’s post to EMAK didn’t really contain a lot of hard numbers. So let’s look at some multpiles.

The acquisition itself is summarized in the most recent investor presentation.

In order to put the complete price tag on the acquisition, one has to make a few calculations. Based on the presentation, I would calculate the total purchase price (equity payment + assumed debt) as follows:

82,7 mn Equity paymnent
10,6 net debt Comet
2,0 net debt Raico
0,3 net debt Sabart
23.4 net debtTecomec

Total 119 mn EUR

EMAK gets the follwoing EBITDA (2010):

7.9 Tecomec
5,3 Comet
3,0 Sabart
0,9 Raico

total 17.1 EBITDA 2010 which would result in a purchase multiple of 7 times EV/EBITDA

After the acquisition, EMAK is targeting 3 mn EBITDA of synergies, sow inlcuding those synergies the purchase would have been priced at 6 x EV/EBITDA for 2010.

For EMAK this would mean after the acquisition ~ 100 mn EUR total debt. At current prices, EMAK’s equity is valued around 90 mn EUR. So total EV is 190 mn.

2011 EBITDA is expected around 40 mn EUR, the Group is targeting 58 mn EUR EBITDA for 2013.

Baes on this, the current share price represents ~ 4.7 EV/EBITDA for 2011 and around 3.3 x EV/EBITDA for 2013.

Historically, EMAK traded around 5-6x EV/EBITDA. The historical numbers show a rock solid steady company which was almost not impacted by any crisis:

TRAIL_12M_EPS EBITDA_PER_SH BOOK_VAL_PER_SH DVD_SH_12M
1999 0.046 0.145 0.518 0.020
2000 0.075 0.182 0.566 0.025
2001 0.097 0.237 0.628 0.034
2002 0.106 0.265 0.691 0.042
2003 0.112 0.276 0.757 0.046
2004 0.104 0.260 0.812 0.047
2005 0.110 0.262 0.880 0.047
2006 0.132 0.296 0.960 0.049
2007 0.179 0.353 1.079 0.057
2008 0.176 0.376 1.178 0.071
2009 0.112 0.258 1.222 0.049
2010 0.138 0.280 1.333 0.049

Finally, after a somehow slower first half year, the 3rd Quarter results acutally were quite good. Lower sales in the Italian home market were more than set off by increasing sales in emerging markets.

So let’s wait and see, but for a relatively defensive company, EMAK looks really cheap.

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