Melrose Industries, an engineering company that seeks to acquire businesses it understands, improve them by a mixture of investment and changed management focus, realise the value created and then return it to shareholders. I have a holding in my income portfolio (epic code: MRO)
Announced today that it has signed an agreement for the sale of their subsidiary Marelli Motori for €212m, which equates to 12.6x EBIT and 9.5x EBITDA. This is a reasonable price for a generators and electric motors company and higher than the much larger Dynacast disposal back in June 2011 (9.1x EBIT and 7.7x EBITDA). It is worth noting though that the Melrose group is on a valuation that is approximately double this, possibly implying that we can expect much higher valuations from some of the other parts.
No comments:
Post a Comment