(Finance) – Equity he lowered to 7 euros per share (from € 7.8) on target price on IVS Groupa company listed on Euronext STAR Milan and active in the vending sector of drinks and snacks, and improved its judgement on the title a “Buy“from” Hold “. The review of the recommendation came after the extraordinary operations of the past months. IVS has in fact reached agreements for the purchase of two important Italian vending operators, Liomatic and Gesaand a minority stake in the retailer Vendomat. On a combined basis, these companies add (on the 2019 numbers) about 220 million euros of sales (about 47% of IVS), 27 million euros of Adj. EBITDA (about 25% of IVS) and exposure to the business of resale (over 100 million euros in sales including Vendomat).
Analysts listed some pros and cons of these transactions. On the one hand, IVS: largely strengthens its leadership in the Italian vending sector (from about 14% to about 22% of market share); it has room to generate interesting synergies; further strengthens relations with large and important F&B operators and roasters. On the other hand: the structure of the agreement is rather complex; IVS pays multiples that are above its historical average.
The revision of the target price and of the judgment by Equita however came due to several factors: IVS significantly underperformed (-57% relative to FTSE Mid since the end of 2019) with the share price -45% compared to pre-covid levels despite the high FCF and margin control; multiples (post deal) are interesting; IVS is positively exposed to the reopening of the economy; the deals announced have a lot of sense from an industrial point of view.