Today Benchmark Holdings announced the sale of its genetics business to Novo Holding for a total potential consideration of GBP260m, equivalent to 17.9x EV/EBITDA – at 16% above our SOTP, we find this attractive. Following the transaction, the company will repay loans, focus on the remaining business and terminate its strategic review.
Benchmark Holdings missed on the Q3 top line, but beat our forecast on EBITDA, driven by a higher margin from genetics. Health remains in a restructuring mode, but cut costs faster than we expected, reaching break-even EBITDA in Q3. The advanced nutrition end-market is guided to remain soft. The sales process is ongoing, with no firm guidance on the timeline. Despite cuts to near-term earnings estimates, we reiterate our BUY and NOK7 target price as we believe long-term value would be realised t...
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