Titan Acquisition of Traçim Cement

The acquisition of Turkish Traçim Cement for c. $ 190m equity value complements TITAN's existing Turkish footprint and increases flexibility in export possibilities, ao to the US. The acquisition also fits well within the Forward 2029 Strategic plan which was presented last month, and which targets to grow EBITDA by 62% to € 1bn by 2029 on a combination of organic growth initiatives and M&A in regions where the company has an established footprint and acquisitions offer sizeable synergies potential. Overall, TITAN is seeking growth in the coming years in both its core heavy materials businesses as well as through growing its alternative cementitious materials platform and enlarging the product portfolio (eg in precast solutions). The rock solid balance sheet with a net debt/EBITDA of only 0.5x gives TITAN ample firepower for both organic growth initiatives and M&A. We continue to remain optimistic on TITAN's prospects in most geographies, not at least in the US, which is TITAN's largest market. The US remains a net-import market in which c. 24% of consumption is imported, implying that, over the short to medium-term, local production alone will not allow to suffice demand. In light of the attractive valuation, both vs peers as well as demonstrated by our DCF, we reiterate our Accumulate rating while increasing our target price from € 55 to € 56.