Investment bank Berenberg says that with the closing of the acquisition of the Meet Group, ProSiebenSat.1 now has an online dating business that has the potential to deliver broad-based revenue and profits growth.
“Management has been very clear that the intention is to conduct an IPO for this business (although a trade sale might also be possible) within the 2022 timeframe, by which time the integration process will be completed and synergies realised,” suggests the bank. “We estimate the net present value of ProSiebenSat.1’s stake in ParshipMeet group to be worth €5.10/share.”
The bank is also hoping that for Germany the worst of the Covid pandemic’s impact on advertising has now past, but also cautions that this assumes no secondary full lockdown for the nation.
“[With] ProSiebenSat.1’s management turning its attention to the medium-term monetisation of non-core assets, we are raising our price target to reflect the inherent upside of a sum-of-the-parts approach,” states Berenberg. “However, with the main monetisation event not likely until 2022, we believe that applying a discount to the sum-of-the-parts model remains relevant. Accordingly, we retain our Hold rating, while recognising that on a two-year view there is potential for more upside than our price target reflects.”
The bank reminds clients that there are other upside events in the calendar, saying that reports suggest there is an M&A process ongoing for Windstar Medical, a provider of OTC healthcare products in the DACH (Germany, Austria and Switzerland) region.
“Press reports suggest a valuation of €250 million, implying c2x revenue and 12x EBITDA, which is reasonable versus the comparables. A sale at this price would be a multiple of c3x cash invested in 2016, on our estimates, thus confirming the value created in the Nucom Group. ProSiebenSat.1’s share of proceeds could be used to reduce the group’s debts, which are above the target level following the acquisition of the Meet Group,” says Berenberg.