The Interpump stock soars at high speed in Piazza Affari with an increase of 6.5% to 50 euros, placing itself in first place in the Ftse Mib. Shares hit an intraday high of € 50.50, new historical record for Interpump which boasts a + 22% on the stock market since the beginning of the year and + 76% in the last 12 months. The acquisition by Interpump of the White Drive Motors & Steering business unit from Danfoss pushed the prices higher. “This acquisition, the most significant in Interpump’s history, will expand the catalog of our products with orbital motors and steering systems, helping to consolidate our role as a global player in hydraulics”, commented Fulvio Montipò, president of Interpump.
As stated in the company’s press release, “the closing of the transaction is expected in the fourth quarter of 2021, following the completion of the acquisition of Eaton’s Hydraulics business by Danfoss. The White Drive Motors & Steering Business Unit includes three manufacturing plants: Hopkinsville (Kentucky, USA), Parchim (Germany) and Wroclaw (Poland). In addition, the acquisition of three production lines from Eaton Hydraulics plants in the USA, which will be moved to the Hopkinsville plant, and a production line in China, is planned. The expected turnover for 2021 should be just over 200 million euros, with an Ebitda of around 45 million euros. The consideration for the transaction, which will be paid in cash at the closing, will refer to an enterprise value quantified at 230 million euros, plus a portion (currently estimated at 40 million euros) variable according to the EBITDA at the pro-format closing to the whole of 2021 “.
The opinion of analysts
The acquisition appeals to analysts and investors. Second Equita, which has a Buy rating on Interpump with a target price of 50 euros, “this is a deal of significant size, but paid for in very attractive multiples despite the good profitability of the asset, probably because Interpump guaranteed speed of negotiation and execution of the deal . Post deal, the company’s leverage remains very low, offering room for further M&A. The good starting profitability, on the other hand, probably offers less room for efficiencies. Assuming a level of D&A similar to Interpump and a cost of prudential debt (1%), Equita preliminarily estimates a contribution to Ebitda 2022 of 12% and Eps greater than 10% ”.
Akros Bank for its part, it confirms the accumulated ratings and raises the target from € 47.6 to € 52.6. “The acquisition is very important and highly synergistic with the other companies in the Interpump Hydraulic division both from a commercial and a commercial point of view”.
Also Kepler Cheuvreux revises its target price from 43 to 48 euros, confirming the hold recommendation. For experts, this deal represents “good news: despite the nature of the seller (a large company and not a family) and size, the multiple is 6 times the EV / Ebitda expected for 2021, in line with the track long-term record “. Analysts estimate “additional revenues for 14%, Ebitda for 12-13% and Eps for 11-12%”.
Intesa Sanpaolo, finally, he confirms the rating add on the share and believes that “the transaction is fully consistent with the external growth strategy announced by the group and should continue to increase Interpump’s positioning in the Hydraulic segment”. Based on its estimates, Isp calculates that “the acquisition could have a counter-diluting effect of about 10% on EPS’s forecasts for 2022”.