European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

Event-Driven

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<li>Saria agreed to acquire Devro for 316.1p/share in cash, for an implied equity value of £540.8 million and an implied EV of £667 million. This represents 9.6x EV/Fwd EBITDA, 65% premium.</li>
<li>The offer price seems fair: the multiple is close to Viscofan's (market leader) and my fair value estimate is 305p (DCF based). A competing bid seems unlikely.</li>
<li>After the shares went ex-dividend, gross spread is 2.7%, but the estimated annual return is 3.6% (assuming settlement by 30 September 2023), which means there should be better opportunities elsewhere.</li>
</ul>


Saria agreed to acquire Devro for 316.1p/share in cash, for an implied equity value of £540.8 million and an implied EV of £667 million. This represents 9.6x EV/Fwd EBITDA, 65% premium.
The offer price seems fair: the multiple is close to Viscofan's (market leader) and my fair value estimate is 305p (DCF based). A competing bid seems unlikely.
After the shares went ex-dividend, gross spread is 2.7%, but the estimated annual return is 3.6% (assuming settlement by 30 September 2023), which means there should be better opportunities elsewhere.


Devro PLC

SARIA/Devro: Agreed Offer