European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>There were no surprises and Inflexion launched the offer for <a href="https://www.smartkarma.com/entities/dwf-group-plc" target="_blank" data-smartkarma-citation="entities:39928:1" rel="noopener">DWF Group (DWF LN)</a> well ahead of the 7 August PUSU deadline. DWF shares increased by c. 15%.</li>
<li>The final proposal maintains what was announced: 97p in cash plus a 3p dividend,8.0x EV/Fwd NTM EBIT and 8.2x Fwd P/E, and an 18% discount to the IPO price.</li>
<li>The closing share price pre-first announcement was 56.5p, taking it as break, the market is pricing a 94% chance to complete the deal. Spread is 2.6%/6.2% (gross/annualised). <strong>Long.</strong>
</li>
</ul>


There were no surprises and Inflexion launched the offer for DWF Group (DWF LN) well ahead of the 7 August PUSU deadline. DWF shares increased by c. 15%.
The final proposal maintains what was announced: 97p in cash plus a 3p dividend,8.0x EV/Fwd NTM EBIT and 8.2x Fwd P/E, and an 18% discount to the IPO price.
The closing share price pre-first announcement was 56.5p, taking it as break, the market is pricing a 94% chance to complete the deal. Spread is 2.6%/6.2% (gross/annualised). Long.



<ul>
<li>
<a href="https://www.smartkarma.com/entities/dwf-group-plc" target="_blank" data-smartkarma-citation="entities:39928:1" rel="noopener">DWF Group (DWF LN)</a> is discussing with Inflexion regarding a 100p/share offer (£342 million implied equity value, 53% premium, 8.2x Fwd P/E, but 18% discount to IPO price). PUSU is 7 August.</li>
<li>Spread to the offer price is 16.2%. The market is pricing a 53% chance to complete the deal, which seems low. Poor cash generation and leverage are already known.</li>
<li>The shares trade at 6.7x Fwd P/E, 7.6% dividend yield and 18.6% FCF yield (IBES estimates). Considering that management has said it would recommend the offer, my TP is 100p.</li>
</ul>



DWF Group (DWF LN) is discussing with Inflexion regarding a 100p/share offer (£342 million implied equity value, 53% premium, 8.2x Fwd P/E, but 18% discount to IPO price). PUSU is 7 August.
Spread to the offer price is 16.2%. The market is pricing a 53% chance to complete the deal, which seems low. Poor cash generation and leverage are already known.
The shares trade at 6.7x Fwd P/E, 7.6% dividend yield and 18.6% FCF yield (IBES estimates). Considering that management has said it would recommend the offer, my TP is 100p.


United Kingdom

DWF Group is a multinational provider of integrated legal and business services. The firm offers legal advisory services, legal operations for process optimization, and connected business services for claims management and technology-enabled solutions. DWF Group was founded in 1977 in Liverpool and is headquartered in Manchester, England.

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DWF Group (DWF LN)

Inflexion/DWF: Deal Announcement

Inflexion has made a firm offer to purchase law firm DWF Group in an operation valued at £342 million at 100p/share. Inflexion didn't wait till the...

Jesus Rodriguez Aguilar

Inflexion/DWF: Compelling Value

DWF Group confirmed it is in discussions with Inflexion Private Equity Partners LLP, and has said that should a firm offer be made, it would be...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Inflexion/​DWF: Deal Announcement

Inflexion has made a firm offer to purchase law firm DWF Group in an operation valued at £342 million at 100p/share. Inflexion didn't wait till the...

Jesus Rodriguez Aguilar

Inflexion/DWF: Compelling Value

DWF Group confirmed it is in discussions with Inflexion Private Equity Partners LLP, and has said that should a firm offer be made, it would be...

Jesus Rodriguez Aguilar

Inflexion/DWF: Deal Announcement