A strategic, earnings-accretive acquisition
McBride has announced its proposed acquisition of the complementary Eurotab unit dosing business. The anticipated acquisition price of c.€40m is just 3.1x EBITDA, post significant synergies, and the compelling deal could add c. 6% to FY27E revenues and FY27E Adj. EPS, rising to c.17% in FY29E.The company has made a binding offer for Eurotab Group (“Eurotab”), a leading manufacturer of cleaning tablets including dishwashing tablets. Operating from two factories in France and one in Turkey, Eurotab has free production capacity that will help address McBride’s capacity constraints, as well as adding product lines, deepening customer relationships, and accessing new markets.
We estimate this margin and earnings accretive deal will add c.6% to group revenues and Adj. EPS in FY27E, rising to c.17% to Adj. EPS in FY29E as synergies are realised (also adding c.50bps to FY29E group EBITDA margin).
The conflict in the Middle East has had a relatively small impact on McBride’s trading activities so far, but conditions are changing with possible supply chain shortages plus chemical and packaging suppliers now passing on higher prices. Hence, McBride also intends to pass on these temporarily higher prices to clients, noting that ‘better value’ private label products typically gain share during macro-economic weakness.
This proposed acquisition appears strategically aligned and offers both compelling synergies and incremental value for shareholders. We reiterate our 245p Fair Value per share, equating to under 9x calendar 2027 PER.
McBride is engaged as a supplier of Private Label Household and Personal Care products. Co. develops and manufactures products for the majority of retailers and main brand owners throughout the U.K., Europe and Asia. Co. operates across 12 countries, with 17 manufacturing facilities. Co. has two division: Household, which activities are managed by four regional teams: the U.K., North, South and East and also the U.K. business imports materials used for manufacturing from the European Union; and Personal Care and Aerosols, which comprises the personal care liquids, skincare and aerosols businesses.
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