Spot the difference;
"Dechra Pharmaceuticals PLC
12 December 2007
PROPOSED ACQUISITION OF VETXX, PLACING & OPEN OFFER OF 11,624,544 NEW ORDINARY
SHARES AT 303 PENCE PER SHARE ON AN 11 FOR 50 BASIS
* Proposed Acquisition of VetXX for a total cash consideration of �61.7
million on a cash free, debt free basis, funded by the Placing and Open Offer of
11,624,544 New Ordinary Shares to raise �35 million (before expenses) and the
new Facility Agreement."
Post deal Dechra had 64.6m shares in issue, so at 303p they were valued at ~£190m, went on to 15 bag over the next dozen or so years. Can the same thing happen again? Given some of the same protagonists are involved & the DCH money will have gone into the hands of some of the original backers, I wouldn't be surprised if it does something similiar! |
Hi redwing1. I based the accretion on FY24 numbers, so the below corrects that to FY25. I've also tweaked the EPS numbers to account for the new share issue.
The result is accretion of ~37%, it's likely that the actual FY25 accretion will be lower due to legal costs & the exact timing of the deal completing (i.e. end of Jan would lose 1/12th of economic value). We will also have small adjustments for finance costs, however balance sheet cash should help offset this.
High level my numbers are;
Pre deal EPS forecast 12.2p, reduces to 10.7p with the 14% dilution
Acquired EPS estimate (£5.6m EBITDA * 0.75 to remove tax = £4.2m / 69m = 6.1p)
New pro forma EPS = 16.8p
So at 245p it's on 14.5x pro forma EPS
Last night it traded at 245p on 12.2p forecast = 20x
Parity would therefore be somewhere over 300p IMO.
Bigger picture, it's a real statement of intent and means they are going places... |
74tom - I agree that it looks potentially an interesting deal but I can't see how your p/e calculations can be correct here? If the deal is 20% accretive to earnings in FY25 (as the announcement suggests) then surely the PER moves to 18.75x? |
That's a cracking deal - PER pre deal was ~22.5x, I estimate it's 14.5x post acquisition (at 232.5p placing price). Consequently, to be trading at the same rating shares need to re-rate to 356p.
The beauty of putting cash to good use - this has the potential to become another Dechra... |
Key points from recent presentation by CEO and FD include:1 - Steady organic growth of 5% continues 2 - no special divs, buybacks etc planned. Money will be spent on acquisitions, credit facilities recently extended.3 - Very useful slide indicating the multiple ways investment may happen and progress to date. Hinted they lost a deal to PE recently so looking at 2025 now. Have ex Dechra deals guy on board as non exec, his contacts invaluable.4 - like so many haven't understood recent share price weakness |
Solid results with some limited organic growth- trading on a PE of circa 20, 2% yield, market cap of £145ml with £33ml of cash, credit facilities extend to 2029.I am expecting some earnings enhancing deals to move the share price but until then there is not going to be much action. |
Nothing too much in the results other than mention of pipeline of investment opportunities. CEO well thought of and has requisite experience. |
Mention by Chris Mills on Youtube vid, possibly.
Good move, tightly held.
Hesitated buying into this but was ultimately a very decent decision and looks pretty solid to me.
Even higher we go? |
Does anyone know why the share price has jumped today |
Good to see Harwood/Oryx upping their holdings. |
IC article this week comes to much the same conclusion as recent posts and may have resulted in today's small rise. |
I assume that they can make 10% pa eps growth from here without too many problems. What's difficult to know is how equitable it is company wide. |
Options awarded. The conditions that need to be met for vesting are very reasonable and align very well with shareholder interests.
Good to see and a sign of intent. |
I have purchased, felt the newish management team have done well since put in place after near death experience 5years ago; paying down debt and now selling the animal chipping business to PE for a transformative sum. None of this is really reflected in share price What they do with the money is the question but CEO said a disciplined approach will be adopted.An under the radar stock in a good market ( I'm a previous Dechra holder) |
Some decent volume through today at 213-214p.
Helping to clear a seller. 14x average daily volume of the past 3 months.
Highest volume since 7th Nov 2023. |
DYOR etc but looking good to me for anyone with a 3-5 year timeframe.
IMC soon.
a) Attractive return
b) enhanced commercial licensing arrangement achieved - wider reach
c) Could be DECHRA, KANE BIOTECH + ANIMALCARE collaboration - CEO reads as keen on this element
"Chief Executive Officer of Animalcare, Jenny Winter said: "This transaction offers value for Animalcare on several levels. Not only have we secured an attractive return on our equity investment in STEM that adds to our investment firepower, we have gained enhanced commercial licensing rights that grant us more options to reach pet owners in these key markets. Further into the future, I'm also excited about the potential to accelerate development of new biofilm-targeting products by combining the knowledge and resources of all three parties." |
Potentially another $5M approx USD from exit of equity in STEM whilst ANCR allowed distribution access to all channels in Europe and UK. DECHRA taking it.
Just found the analysts presentation on the web, page 16, the have approx 7 products or companies in discussion out of more than 450 to begin with. Homing in on target(s) and now have the cash and credit facilities to pull the trigger(s).
I like the look of the way they have a plan and focused on executing it. |
IMC mid April for the results, presentation for analysts today will be on the website soon.
Net cash now, a good cushion. |
A pullback before heading higher imho.
Was fortunate enough to be accumulating for a while.
Patience needed.
GLA, dyor etc. |
Looks like they got a very good price (£24.9m) for Identicare (annual sales just circa £3m) and the disposal has also enabled them to restructure the balance sheet with a post completition net cash position of circa £27m. Would doubt that the CMA investigation would have any significant concerns for them since the issue relates to Vet mark up margins rather than ANCR wholesale prices. This company seems to be under most retail investors radar screens but circa 70% of the shares are owned by around half a dozen institutions so this looks worth further research and investigation. |
have to agree that ANCR least likely to be affected by the CMA enquiry, just putting it out as a conjecture, if the whole vet industry is to be brought to heal by the authorities. Not trying to scare at all as ANCR is a family holding, albeit small, sadly, in comparison with my own holding in CVSG which is much more in the firing line. |
Exactly. Trying to scare.
Need more vets = more competition = more demand = good for all except monopoly vets.
ANCR should not be damaged but more likely see more demand. |
No. The CMA was complaining that some vets add a big mark up on the wholesale price vs the internet pharmacies. |
Trying to scare?
Ignore and carry on. |
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