European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

On 21 October, Bloomberg reported that Clayton Dubilier &amp; Rice LLC and other undisclosed private equity firms expressed interest in acquiring German industrial service provider <a href="https://www.smartkarma.com/entities/bilfinger-se" target="_blank" data-smartkarma-citation="entities:21630:1" rel="noopener">Bilfinger SE (GBF GR)</a>.
On 6 November, Bloomberg reported that Bilfinger launched a sale process and hired an adviser to formally gauge buyout interest. Certain prospective private equity buyers reportedly are looking to take over and expand Bilfinger through acquisitions and eventually take the larger entity public. Bilfinger has not yet finalized its plans and could still decide against a sale.
Bilfinger has released Q3 results, the shares have dropped 7.5%.
I value Bilfinger as a SOTP: using comparable companies, the average of the median implied EV/Forward EBITDA and Forward P/E is €20.62 per share, plus the BV of Apleona, €5.95 per share (€240 mn vs. Bilfinger's market cap of €899 mn), gives a total of €26.57 per share.
<ul>
<li>So either the market is very pessimistic about the growth and margins recovery of Bilfinger (for a reason) or the stake in Apleona comes for free.</li>
<li>Both the ongoing takeover speculation and the potential sale of Apleona currently seem to be the main drivers for the share price, but both are factors beyond the control of Bilfinger's management. Results remain challenging due to weakness in the markets where Bilfinger operates, but cost controls and higher FCF are positives.</li>
</ul>
Recommendation: BUY on SOTP higher than the current market value.
The Insight is marked bullish, although it comes with a health warning.

On 21 October, Bloomberg reported that Clayton Dubilier &amp; Rice LLC and other undisclosed private equity firms expressed interest in acquiring German industrial service provider Bilfinger SE (GBF GR).
On 6 November, Bloomberg reported that Bilfinger launched a sale process and hired an adviser to formally gauge buyout interest. Certain prospective private equity buyers reportedly are looking to take over and expand Bilfinger through acquisitions and eventually take the larger entity public. Bilfinger has not yet finalized its plans and could still decide against a sale.
Bilfinger has released Q3 results, the shares have dropped 7.5%.
I value Bilfinger as a SOTP: using comparable companies, the average of the median implied EV/Forward EBITDA and Forward P/E is €20.62 per share, plus the BV of Apleona, €5.95 per share (€240 mn vs. Bilfinger's market cap of €899 mn), gives a total of €26.57 per share.

So either the market is very pessimistic about the growth and margins recovery of Bilfinger (for a reason) or the stake in Apleona comes for free.
Both the ongoing takeover speculation and the potential sale of Apleona currently seem to be the main drivers for the share price, but both are factors beyond the control of Bilfinger's management. Results remain challenging due to weakness in the markets where Bilfinger operates, but cost controls and higher FCF are positives.

Recommendation: BUY on SOTP higher than the current market value.
The Insight is marked bullish, although it comes with a health warning.

Germany

Bilfinger SE provides industrial services, power services, building and facility services, construction, and concessions.  The Company's industrial services include repairs, maintenance, and modernization.  Bilfinger also provides power services which include maintenance, service, and efficiency enhancements as well as building and facility services for real estate.

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Bilfinger SE (GBF GR)

Bilfinger SE: Private Equity Interest

Using multiples plus the BV of Apleona gives a valuation of €26.57 per share. Either the market is very pessimistic about growth and margins...

Jesus Rodriguez Aguilar

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