IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rigaku-holdings-corporation" target="_blank" data-smartkarma-citation="entities:43950:1" rel="noopener">Rigaku Holdings (268A JP)</a> is Japan’s leading manufacturer of X-ray analysis, measurement and testing instruments. It is seeking to raise up to US$760 million. </li>
<li>In Japan, Rigaku’s XRD (X-ray diffraction) has a high market share of 75%. Around 70% of its revenue is derived from customers outside Japan.   </li>
<li>The bull case rests on high customer switching costs, peer-leading revenue growth, top-quartile profitability, FCF generation, and low leverage.</li>
</ul>



Rigaku Holdings (268A JP) is Japan’s leading manufacturer of X-ray analysis, measurement and testing instruments. It is seeking to raise up to US$760 million. 
In Japan, Rigaku’s XRD (X-ray diffraction) has a high market share of 75%. Around 70% of its revenue is derived from customers outside Japan.   
The bull case rests on high customer switching costs, peer-leading revenue growth, top-quartile profitability, FCF generation, and low leverage.


Rigaku Holdings (268A JP) IPO: The Bull Case

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rigaku-holdings-corporation" target="_blank" data-smartkarma-citation="entities:43950:1" rel="noopener">Rigaku Holdings (268A JP)</a> provides cutting-edge analytical solutions centered on X-ray technology globally. The company is one of the largest players globally in X-ray diffraction instrument market.</li>
<li>The company has filed for an IPO on the Tokyo Stock Exchange and plans to raise proceeds of around US$900m from the IPO at a potential valuation of US$2bn.</li>
<li>In this insight, we discuss Rigaku’s business model, key drivers, financials and outlook for the company.</li>
</ul>



Rigaku Holdings (268A JP) provides cutting-edge analytical solutions centered on X-ray technology globally. The company is one of the largest players globally in X-ray diffraction instrument market.
The company has filed for an IPO on the Tokyo Stock Exchange and plans to raise proceeds of around US$900m from the IPO at a potential valuation of US$2bn.
In this insight, we discuss Rigaku’s business model, key drivers, financials and outlook for the company.


European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Shareholders of Cambridge (UK)-based  <a href="https://www.smartkarma.com/entities/abcam-plc-fdbd66c6-5b3f-46b0-9e33-c7c79214544f" target="_blank" data-smartkarma-citation="entities:38641:1" rel="noopener">Abcam (ABCM US)</a> followed Glass Lewis and ISS recommendations and approved (&gt;84%) the scheme resolutions at both the Court Meeting and the GM.</li>
<li>The $24/share cash offer represents 10x EV/Fwd Revenue, 25x EV/Fwd NTM EBITDA. <a href="https://www.smartkarma.com/entities/danaher-corp" target="_blank" data-smartkarma-citation="entities:8243:1" rel="noopener">Danaher Corp (DHR US)</a> and Abcam have guided that the transaction is expected to close by mid-2024.</li>
<li>Spread is 3.21%/6.21% (gross/annualised, assuming settlement by 30 May). From the current levels, I see a balanced risk/reward.</li>
</ul>


Shareholders of Cambridge (UK)-based  Abcam (ABCM US) followed Glass Lewis and ISS recommendations and approved (&gt;84%) the scheme resolutions at both the Court Meeting and the GM.
The $24/share cash offer represents 10x EV/Fwd Revenue, 25x EV/Fwd NTM EBITDA. Danaher Corp (DHR US) and Abcam have guided that the transaction is expected to close by mid-2024.
Spread is 3.21%/6.21% (gross/annualised, assuming settlement by 30 May). From the current levels, I see a balanced risk/reward.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>If you are still long the <a href="https://www.smartkarma.com/entities/hokuhoku-financial-group-inc" target="_blank" data-smartkarma-citation="entities:19006:1" rel="noopener">Financial Group (8377 JP)</a> from before, stay long.If you sold Hokuhoku from before, be long again, and buy on weakness</li>
<li>Disaster for arb players as AusSuper rewrites the record books as an investor class and shoots down Brookfield's sweetened Offer for <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/kyocera-corp" target="_blank" data-smartkarma-citation="entities:753:1" rel="noopener">Kyocera (6971 JP)</a> announced Q2 results and lowered its full-year forecast. Then the CEO said it was "reconsidering" what to do with <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI (9433 JP)</a> shares (after an AGM disaster).</li>
</ul>


If you are still long the Financial Group (8377 JP) from before, stay long.If you sold Hokuhoku from before, be long again, and buy on weakness
Disaster for arb players as AusSuper rewrites the record books as an investor class and shoots down Brookfield's sweetened Offer for Origin Energy (ORG AU).

Kyocera (6971 JP) announced Q2 results and lowered its full-year forecast. Then the CEO said it was "reconsidering" what to do with KDDI (9433 JP) shares (after an AGM disaster).


Last Week in Event SPACE: Hokuhoku, Origin Energy, KDDI, BoJ

<ul>
<li>The $26.00/share cash offer of <a href="https://www.smartkarma.com/entities/thermo-fisher-scientific-inc-49322cfa-b354-4c3d-ac3b-f4e91aead32b" target="_blank" data-smartkarma-citation="entities:26834:1" rel="noopener">Thermo Fisher Scientific (TMO UN)</a> for Swedish <a href="https://www.smartkarma.com/entities/olink-holding-ab" target="_blank" data-smartkarma-citation="entities:36991:1" rel="noopener">Olink Holding (OLK US)</a> started on 31 October. The 74% premium reflects that high-growth, positive adjusted EBITDA targets are rare.</li>
<li>The offer values Olink at ~12.2x EV/NTM Fwd revenue vs. 6.4x median of peers. Irrevocables total 66%, but the minimum acceptance condition requires acceptances from a high 70.6% of float. </li>
<li>Barring any unforeseen circumstances, such as regulatory action, I anticipate the deal closing and set my TP at $26/share. Gross spread is 4.81%.</li>
</ul>


The $26.00/share cash offer of Thermo Fisher Scientific (TMO UN) for Swedish Olink Holding (OLK US) started on 31 October. The 74% premium reflects that high-growth, positive adjusted EBITDA targets are rare.
The offer values Olink at ~12.2x EV/NTM Fwd revenue vs. 6.4x median of peers. Irrevocables total 66%, but the minimum acceptance condition requires acceptances from a high 70.6% of float. 
Barring any unforeseen circumstances, such as regulatory action, I anticipate the deal closing and set my TP at $26/share. Gross spread is 4.81%.


United States

Thermo Fisher Scientific, Inc. manufactures scientific instruments, consumables, and chemicals. The Company offers analytical instruments, laboratory equipment, software, services, consumables, reagents, chemicals, and supplies to pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions, and government agencies.

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Thermo Fisher Scientific (TMO UN)

Rigaku Holdings (268A JP) IPO: The Bull Case

The bull case rests on high customer switching costs, peer-leading revenue growth, top-quartile profitability, FCF generation, and low leverage.

Arun George

Rigaku Holdings IPO: Initial Thoughts

Rigaku, a global leader in scientific instruments based on X-ray technology, has filed for an IPO in Japan with plans to raise $900m at a...

Shifara Samsudeen, ACMA, CGMA

Danaher/Abcam: Balanced Risk/Return

Shareholders of Abcam approve scheme resolutions, with a $24/share cash offer from Danaher Corp expected to close mid-2024. Balanced risk/reward...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Hokuhoku, Origin Energy, KDDI, BoJ

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Start of Tender Offer

Thermo Fisher Scientific offers $26/share for Olink Holding, 12.2x EV/NTM Fwd revenue, higher than peers, 74% premium due to rare high-growth,...

Jesus Rodriguez Aguilar

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Rigaku Holdings (268A JP) IPO: The Bull Case

The bull case rests on high customer switching costs, peer-leading revenue growth, top-quartile profitability, FCF generation, and low leverage.

Arun George

Rigaku Holdings IPO: Initial Thoughts

​Rigaku, a global leader in scientific instruments based on X-ray technology, has filed for an IPO in Japan with plans to raise $900m at a...

Shifara Samsudeen, ACMA, CGMA

Danaher/Abcam: Balanced Risk/Return

​Shareholders of Abcam approve scheme resolutions, with a $24/share cash offer from Danaher Corp expected to close mid-2024. Balanced risk/reward...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Hokuhoku, Origin Energy, KDDI, BoJ

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Start of Tender Offer

​Thermo Fisher Scientific offers $26/share for Olink Holding, 12.2x EV/NTM Fwd revenue, higher than peers, 74% premium due to rare high-growth,...

Jesus Rodriguez Aguilar

Rigaku, a global leader in scientific instruments based on X-ray technology, has filed for an IPO in Japan with plans to raise $900m at a...

Shareholders of Abcam approve scheme resolutions, with a $24/share cash offer from Danaher Corp expected to close mid-2024. Balanced risk/reward...

Thermo Fisher Scientific offers $26/share for Olink Holding, 12.2x EV/NTM Fwd revenue, higher than peers, 74% premium due to rare high-growth,...