ACS: GOODBYE COBRA... AND MORE HIGHWAYS AND RENEWABLES (ANÁLISIS BANCO SABADELL)
Awaiting the sale of Cobra, value & strategic implications. BUY.The sale of Cobra to Vinci (€ 5.2 Bn EV, +23% vs. our valuation) would increase our T.P. by as much +10% (from € 29.80/sh. to € 32.80/sh.), opening the door to several strategic options (with the total collection in cash, ACS’s net cash’21e would stand at € 1.5 Bn with a ~80% weight of Construction in EBITDA). ACS could raise the weight of concessions (toll roads) and/or renewables (collaboration options with VINCI for the development of its renewable pipeline of 25GW, not included in our valuation), along with more remote options (extraordinary DPS, raising its stake in Hochtief or CIMIC). The confirmation of the sale should be a catalyst, (ACS is trading at a -20% discount vs. peers, having slid -10% since January’s highs), as despite the possibility of some changes in the consolidation scope, at our valuation, the market is pricing in a -30% cut to the price agreed.
ACS Actividades de Construccion y Servicios is a holding company. Through its subsidiaries, Co.'s activities are divided into the following areas: Construction, engaged in the construction of civil works, and residential and non-residential building construction; industrial services, engaged in the development of applied engineering services, installations and the maintenance of industrial infrastructures in the energy, communications and control systems sectors; services, groups together environmental services, the outsourcing of building maintenance services, logistics and transport services; and concessions, mainly engaged in transport infrastructure concessions.
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