Corbion Model update- Emulsifiers divestment solves balance sheet fears
Corbion finally succeeded in selling its emulsifiers business and the price obtained looks attractive ($362m cash or c $275m post tax/transaction costs). The divestment largely solves the company's balance sheet issues and based on our updated model we forecast net debt/EBITDA to drop to 2.2x by the end of 2024. All eyes are now on next week's CMD, where we hope to get a strategic decision on PLA and also expect the company to announce a sizeable savings plan. We still appreciate Corbion for its leading position in lactic acid and consider valuation to be attractive. With balance sheet fears now largely over, we keep our Accumulate rating and € 26 TP.Corbion is an internationally operating company engaged in the development, production, sale and distribution of bakery supplies and food ingredients. Co. is engaged in the Bakery Supplies and Lactic Acid business. Co.'s operations are divided into two segments: Bakery operations and Lactic acid operations. Co.'s Bakery operations comprise the development, production and sale of bakery ingredients and products. Co.'s Lactic acid operations involve the production of lactic acid and lactic acid derivatives which are used in food, pharmaceutical and technical products. Co. operates mostly in Europe and North America. Co.'s brands are Waldkorn, Kate's cakes, Purac, Carel, MeisterMarken.
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