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The disposal lowers the revenue by 20% but profit lowered by 40%..The shareholder returns are around 105p per share,but l predict the SP will go lower than that post cash return.due to lower profits and cash return..Not 100% sure this is a good deal..
What’s fair value on market cap (SP x shares in issues) do people think and why 😀
I think it’s better than that. It leaves with TICC (£35m - £40m EBITDA). Let’s say this is worth £300m to a French PE
We are also left with the OH business which is £10m - £15m EBITDA and should be worth a 10x multiple
So your share price today could be £405m plus £300m plus £100m so £805m!
Tbh this is still short of the £10 a share all time high but the world is a different place now
I do think the French deal is real as I don’t see why they would return all the surplus cash. Surely you’d say and we are keeping £50m/ war chest for M&A
Well I wasn't expecting that. Seems Betaville were right on the rumour but wrong on the detail.
Currently MRL is valued at around £600m (market cap + Debt). So to get 400m for one division seems a great deal.
Leaves us with the TIC business + 200m cash.
How much this is worth is anyone's guess. Presumably they couldn't sell this for the rumoured 600m, but if its worth 400m that could give us a substantial rise today. Looks a decent deal.
Well that was unexpected but a decent result. With the shorts (and JP Morgan again with awful timing) this will pop. The business will still either need to sell OH or TICC as they don’t belong together so the £300m for TICC may still be on the cards!
Tbh Inflexion have had a good deal when you consider HG paid £1bln for Ideagen with similar EBITDA
Thanks
If there’s substance they will have to RNS. If it’s just rumour we won’t hear anything
Shame £300m is where we are looking (c.8-9x EBITDA) but it really is a buyers market. Rumour is that horizon is having a really difficult time with Churches Fire atm so that won’t of helped Marlowe trying to get a bigger premium
Goldenyears - It’s behind a paywall, but if you can get access to twitter, and search for “Conor maguire Value situations” he has screenshot the article. It doesn’t say a huge amount more than has been posted on here tbh
Thanks. How did you view the article
Agree £300m is not where I was expecting! Tbh is it less than what Marlowe paid to build it?
Its a betaville “rare” rumour. £300m would be disappointing, but something needs to be done about the debt
Can you share a link I can’t see anything
Bloomberg report posted on X that they are in exclusive discussions with French PE house re sale for £300m
But nothing has been announced
Hopefully TICC is finally sold
What’s going on?
Https://www.shponline.co.uk/news/investment-needed-to-prevent-future-economically-inactive-workers-iosh-warns/amp/
Hopefully this will FINALLLY come in the next budget
Further good news on inflation. 50% chance of a BoE cut in March! The benefit for Marlowe is a double boost as as SONIA falls the interest payment falls so more debt can be paid off but also as more debt is paid off the gearing premium falls which drives the same benefit!
Marlowe just needs to stick to the knitting now and focus on FCF
Yes absolutely as soon as ilhit the Covid low. Already have way too much as been invested since the v early 100p days. Agree with your analysis. Also need to remember most of the spend with Marlowe by SMEs is non discretionary
Did you dip your toe?
Hopefully as the markets start to price cheaper debt we can move to a lower deal in the coming months rather than having to wait for the BoE cuts
The only other point for Marlowe is how are SMEs being squeezed atm? That’s why I’m holding my forecasts at £90m for this year and next. Meaning as you point out this is a value gain based on interest rates falling and debt being paid down quicker
Sale of TICC is the wild card
As I mentioned previously, interest rates looked to have peaked and Marlowe is up 20% off the lows. Plenty more upside here
Huge volume yesterday and although the price did get hammered it hopefully shows there’s so buyers at this price
Debt markets easing so hopefully the TICC deal can come back to life. A sale of that even at 12x would be amazing
Leaving a pure software business which should have a very nice multiple
No more M&A. Let’s extract synergies and focus on organic growth and deleveraging
Agree. Working on a flat £90m of EBITDA for this year and next we hit the £10m - £12m deleverage that the board state at the end of this year and then we chop another £8m off the year after
That £8m includes £20m of interest payments (should be lower), £5m restructuring, all the deferred consideration cleared and higher tax rate
The following year the FCF accelerates massively
The drop is well overdone here. Most likely growth funds on a forced exit. All the downside is in the price. This is a very good business with quality recurring revs which are growing. The 1st sign of interest rates coming down flips the story on its head. Cash generation strong and will pay down debt. Value buyers will be loading up here soon I'm sure and we know how quickly it can move.
Will we breach it?
Not sure that’s right. Look at note 10