NRC Group (Buy, TP: NOK82.00) - Yet another M&A boost
NRC announced it will acquire materials transportation company Gunnar Knutsen AS (GK) for NOK199m in Q3. With an EV/EBITDA of c6.6x, we see a positive EPS impact and value added for the company. So far, Q3 has been softer than we expected in terms of announced orders, prompting us to cut our 2019 LFL forecast by c2%. However, given our raised forecasts on the back of the acquisition and peer valuation, we have raised our target price to NOK82 (73), and we keep our BUY.NRC Group collects, processes and sells map data. Co. provides services to the Norwegian market, but focuses mainly on projects abroad. Co.'s geo server, BlomURBEX®, enables online distribution of Co.'s products and databases to its customers. The content of BlomURBEX® consists of Co.'s oblique aerial images, TerraItaly® database and 3D city models. Co.'s operations are divided into two main business areas: Blom Geo Engineering Services, which collects and produces geographic information; and Blom Information Services, which provides geographic information as standardized services or through applications adapted to various uses and platforms.
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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