European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>There were no surprises and Inflexion launched the offer for <a href="https://www.smartkarma.com/entities/dwf-group-plc" target="_blank" data-smartkarma-citation="entities:39928:1" rel="noopener">DWF Group (DWF LN)</a> well ahead of the 7 August PUSU deadline. DWF shares increased by c. 15%.</li>
<li>The final proposal maintains what was announced: 97p in cash plus a 3p dividend,8.0x EV/Fwd NTM EBIT and 8.2x Fwd P/E, and an 18% discount to the IPO price.</li>
<li>The closing share price pre-first announcement was 56.5p, taking it as break, the market is pricing a 94% chance to complete the deal. Spread is 2.6%/6.2% (gross/annualised). <strong>Long.</strong>
</li>
</ul>


There were no surprises and Inflexion launched the offer for DWF Group (DWF LN) well ahead of the 7 August PUSU deadline. DWF shares increased by c. 15%.
The final proposal maintains what was announced: 97p in cash plus a 3p dividend,8.0x EV/Fwd NTM EBIT and 8.2x Fwd P/E, and an 18% discount to the IPO price.
The closing share price pre-first announcement was 56.5p, taking it as break, the market is pricing a 94% chance to complete the deal. Spread is 2.6%/6.2% (gross/annualised). Long.



<ul>
<li>
<a href="https://www.smartkarma.com/entities/dwf-group-plc" target="_blank" data-smartkarma-citation="entities:39928:1" rel="noopener">DWF Group (DWF LN)</a> is discussing with Inflexion regarding a 100p/share offer (£342 million implied equity value, 53% premium, 8.2x Fwd P/E, but 18% discount to IPO price). PUSU is 7 August.</li>
<li>Spread to the offer price is 16.2%. The market is pricing a 53% chance to complete the deal, which seems low. Poor cash generation and leverage are already known.</li>
<li>The shares trade at 6.7x Fwd P/E, 7.6% dividend yield and 18.6% FCF yield (IBES estimates). Considering that management has said it would recommend the offer, my TP is 100p.</li>
</ul>



DWF Group (DWF LN) is discussing with Inflexion regarding a 100p/share offer (£342 million implied equity value, 53% premium, 8.2x Fwd P/E, but 18% discount to IPO price). PUSU is 7 August.
Spread to the offer price is 16.2%. The market is pricing a 53% chance to complete the deal, which seems low. Poor cash generation and leverage are already known.
The shares trade at 6.7x Fwd P/E, 7.6% dividend yield and 18.6% FCF yield (IBES estimates). Considering that management has said it would recommend the offer, my TP is 100p.


United Kingdom

DWF Group PLC provides legal services. The Company offers legal solutions for construction and infrastructure, energy, food, healthcare, hospitality, insurance, real estate, retail, financial services, and industrial sectors. DWF Group serves customers worldwide.

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DWF Group (DWF LN)

Inflexion/DWF: Deal Announcement

Inflexion has made a firm offer to purchase law firm DWF Group in an operation valued at £342 million at 100p/share. Inflexion didn't wait till the...

Jesus Rodriguez Aguilar

Inflexion/DWF: Compelling Value

DWF Group confirmed it is in discussions with Inflexion Private Equity Partners LLP, and has said that should a firm offer be made, it would be...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Inflexion/​DWF: Deal Announcement

Inflexion has made a firm offer to purchase law firm DWF Group in an operation valued at £342 million at 100p/share. Inflexion didn't wait till the...

Jesus Rodriguez Aguilar

Inflexion/DWF: Compelling Value

DWF Group confirmed it is in discussions with Inflexion Private Equity Partners LLP, and has said that should a firm offer be made, it would be...

Jesus Rodriguez Aguilar

Inflexion/DWF: Deal Announcement