Given the highly cash generative history and capabilities of both companies and the economies of scale which the merger will likely produce an sp target close to 1,100 appears warranted. Downside risks are execution of the merger and the potential sales of shares as the current US business owners look to release their investment.
The more I delve into this company - visited two sites today - the more I'm convinced that this sp will not, in the medium to long-term, disappoint me.
Interim announcement on 8 Sept will likely move sp out of its recent narrow trading range. Indications from July's trading update point towards a positive announcement with confirmation of a very healthy and sustainable dividend. Business is net debt free and in an economic 'sweet spot'.
This is a classic. A company committed to very appreciable growth; throwing off cash from its nature business; meeting a growing demand amongst companies large and small with a billionaire CE (who knows a thing or two or three about making money) which has seen its sp decline today. Such are the reasons why I love this illogical market and it's willingness to let be make money.
Have a read of the report and see that the mature business is a cash generator. Then factor in the cash which the newer locations will likely add. Then have a look at recent forecasts from brokers.