Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cox & Kings Ltd
Focus Likely to Shift to
Acquisition Synergies – OW
Quick Comment: In our view, the potential acquisition
of Holidaybreak Plc (HBR) is likely to be a game changer
for C&K. If consummated, the acquisition will likely be
earnings accretive by 40-45% for C&K for F13e (based
on our current valuations for C&K and Bloomberg
consensus estimates for HBR). Core business RoCE
will likely fall from current ~20% to ~13%, we believe, yet
valuation at ~8x F13e combined earnings, appears
compelling, we believe.
What's new: The boards of Cox & Kings Ltd and
Holidaybreak plc have announced that they have
reached agreement on the terms of a recommended
cash acquisition by Prometheon Holdings (UK) Limited,
a wholly-owned subsidiary of Cox & Kings, of the entire
share capital of HBR. Under the terms of the acquisition,
HBR shareholders will receive 432.1 pence in cash per
HBR share. In order to become effective, the acquisition
must, among other things, be approved by the requisite
majorities of the HBR Shareholders. The Offer Price
values HBR's at approximately £312.0mn (~£450mn
EV)
Acquisition a likely game changer for C&K:
According to management the acquisition will likely help
C&K to: 1) Maximize its service offering to an enlarged
customer base – HBR is a leader in its niche segments
and operates in highly attractive complementary
business areas to C&K. 2) The combination will provide
HBR with a platform to expand internationally by offering
the company's products to C&K customers in India and
rest of Asia. 3) In particular, HBR’s Education business
will capitalize on the latent demand for European
education programmes and facilities that is fast
emerging within India. 4) In these new geographies the
peak periods for outbound travel coincide with the
European off-peak season and as a result the
seasonality of HBR’s business will be reduced.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cox & Kings Ltd
Focus Likely to Shift to
Acquisition Synergies – OW
Quick Comment: In our view, the potential acquisition
of Holidaybreak Plc (HBR) is likely to be a game changer
for C&K. If consummated, the acquisition will likely be
earnings accretive by 40-45% for C&K for F13e (based
on our current valuations for C&K and Bloomberg
consensus estimates for HBR). Core business RoCE
will likely fall from current ~20% to ~13%, we believe, yet
valuation at ~8x F13e combined earnings, appears
compelling, we believe.
What's new: The boards of Cox & Kings Ltd and
Holidaybreak plc have announced that they have
reached agreement on the terms of a recommended
cash acquisition by Prometheon Holdings (UK) Limited,
a wholly-owned subsidiary of Cox & Kings, of the entire
share capital of HBR. Under the terms of the acquisition,
HBR shareholders will receive 432.1 pence in cash per
HBR share. In order to become effective, the acquisition
must, among other things, be approved by the requisite
majorities of the HBR Shareholders. The Offer Price
values HBR's at approximately £312.0mn (~£450mn
EV)
Acquisition a likely game changer for C&K:
According to management the acquisition will likely help
C&K to: 1) Maximize its service offering to an enlarged
customer base – HBR is a leader in its niche segments
and operates in highly attractive complementary
business areas to C&K. 2) The combination will provide
HBR with a platform to expand internationally by offering
the company's products to C&K customers in India and
rest of Asia. 3) In particular, HBR’s Education business
will capitalize on the latent demand for European
education programmes and facilities that is fast
emerging within India. 4) In these new geographies the
peak periods for outbound travel coincide with the
European off-peak season and as a result the
seasonality of HBR’s business will be reduced.
No comments:
Post a Comment