The “Return to Craft” strategy has been well executed. The Matsos acquisition accelerates this process by adding well-known brands to a stable of strongly growing Gage products. The purchase price, at ~7x incremental EBITDA is attractive, and although largely funded by up to $12m in new equity at $0.085, we see EPS accretion close to 30% in FY19. Our blended valuation climbs to $0.100 (prior $0.090), however with strong momentum we introduce a target price of $0.117 (blended valuation 1-year out). Although the price is up nearly 25% on the placement and SPP price, there is still upside. BUY maintained.
To access our review of Gage Roads Brewing please log in under the Client Area Log In at the bottom of this page.
Argonaut’s Client Area allows you to view delayed share prices, access Argonaut’s wealth of Research as well as create custom portfolios and set up company watch lists.
If you would like to access our research please contact us to create an account.
Perth:
clientservices@argonaut.com
+61 8 9224 6888
Hong Kong:
clientserviceshk@argonaut.com
+852 3557 4888