Archer (Hold, TP: NOK9.00) - Quintana IPO launched
Archer subsidiary Quintana Energy Services (QES) launched its IPO at a USD12–15 per-share price. Based on this range, conversion of a loan to shares, and its Q3 balance sheet, we estimate this implies an EV of USD370m–435m for QES. In our SOTP in Archer at NOK7.7 per share, we had applied an EV of USD350m for QES, and we consider the proposed IPO range a positive as the mid-point is USD403m. However, as we believe consensus QES valuation is an EV around USD550m, we believe the market will consider the IPO range on the downside for Archer. On our estimates, the current Archer share price (NOK11.9) implies a USD20 QES share price, 48% above the mid-point in the IPO range.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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