Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

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Equity Capital Markets

No-moat-rated Boral has entered a binding agreement to buy U.S.-listed Headwaters for AUD 3.5 billion. The deal will be funded by AUD 2.1 billion in new equity, AUD 1.1 billion in debt, and existing cash. The equity component includes a 1 for 2.22 entitlement offer to existing shareholders.Our fair value estimate is reduced 4% to AUD 4.80 after revising Boral U.S. earnings and including the acquisition and raising. Based on the theoretical ex-rights price, or TERP, Boral is overvalued, and the risk of a downturn in Australian construction may be underestimated by the market. The AUD 4.80 per share entitlement price is better value, representing a 15% discount to TERP but is still only in line with fair value. Investors wanting to increase exposure to Boral and gain greater leverage to the U.S. though should consider taking up rights. The deal has merit, as it reduces reliance on U.S. brick earnings and offers cost and revenue synergies.Analyst: Tim Mann

No-moat-rated Boral has entered a binding agreement to buy U.S.-listed Headwaters for AUD 3.5 billion. The deal will be funded by AUD 2.1 billion in new equity, AUD 1.1 billion in debt, and existing cash. The equity component includes a 1 for 2.22 entitlement offer to existing shareholders.Our fair value estimate is reduced 4% to AUD 4.80 after revising Boral U.S. earnings and including the acquisition and raising. Based on the theoretical ex-rights price, or TERP, Boral is overvalued, and the risk of a downturn in Australian construction may be underestimated by the market. The AUD 4.80 per share entitlement price is better value, representing a 15% discount to TERP but is still only in line with fair value. Investors wanting to increase exposure to Boral and gain greater leverage to the U.S. though should consider taking up rights. The deal has merit, as it reduces reliance on U.S. brick earnings and offers cost and revenue synergies.Analyst: Tim Mann

Boral U.S. Expansion Via AUD 3.5 Billion Acquisition. FVE Reduced to AUD 4.80

Boral Ltd

Boral U.S. Expansion Via AUD 3.5 Billion Acquisition. FVE Reduced to AUD 4.80