finnCap Research Company Notes - 19 November 2018
Nov 19, 2018 / News
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Sector: Life Sciences
Tristel (TSTL): Acquisition – material EPS accretion
Key data
- Share price (p) 227.5
- Target price (p) 300.0
- Market cap (£m) 97.8
- Enterprise value (£m) 91.1
Tristel has acquired Ecomed (distributor for Benelux and France) for a maximum consideration of €6.8m (£6.0m), of which €5m is paid up front with the balance contingent on achieving a minimum of €0.8m of EBITDA in calendar year 2018 and revenue growth in excess of 15%. This is in line with the company’s strategy to have a direct sales presence in markets where possible. The maximum consideration represents c.2.1x and 6.8x prospective EV/Sales and EV/EBITDA respectively, and is expected to be accretive to EPS by 5% in FY 2019 (includes the cost of acquisition and integration) and 10 in FY 2020. We increase our target price by 7% to 300p, implying FY 2020 P/E of 24.0x and supported by 2-year CAGR EPS growth of 17%.
Mark Brewer | mbrewer@finncap.com