Mayr-Melnhof raised to BUY, TP EUR 210 - Pedal to the metal - M&A as catalyst
The acquisitions Kotkamills and Kwidzyn represent a leap forward, not only from a growth, but also as MM Group is effectively deploying its balance sheet in what we perceive as value-accretive takeoversApart from compelling valuations, the broader product portfolio coupled with an increased focus on opportunities arising from plastic substitution as well as plausible synergy targets are promising
The takeovers add annualised revenues of close to EUR 900 mn and EBITDA of almost EUR 150 mn, or an impact of incrementally roughly 35% to Mayr-Melnhof's current figures
Against the backdrop of these game changing considerations we return as buyers to the investment case. We raise the target price to EUR 210 from EUR 154 and upgrade Mayr-Melnhof to BUY from HOLD
Mayr-Melnhof Karton and its subsidiaries are primarily engaged in manufacturing and selling cartonboard and folding cartons with a focus on Europe. Co.'s business segments include: Mayr-Melnhof Karton, which is engaged in the manufactures and markets numerous grades of cartonboard, concentrating on coated cartonboard produced predominantly from recovered paper as well as virgin fiber-based cartonboard; and Mayr-Melnhof Packaging, which is engaged in converts cartonboard into industrial printed folding cartons mainly for the food industry, other consumer goods industries, and into cigarette packaging as well as confectionary packaging.
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