Investorideas.com – big ideas for global investors Search www.investorideas.com
   Member Access       Sign-up       Newsfeeds        Companies        Stock Directories       Research       Video       Funding   




Flash: Cemargos continues buying in the strategic region

Price: COP10,100; Target Price: COP 9,950.

Ideas get bigger when you share them...

April 9, 2014 (www.investorideas.com newswire) Cemargos announced a new acquisition, this time for grinding assets in the French Guiana for EUR 50 mn (USD 69 mn). Below some remarks on the transaction with the available information:

Join Investor Ideas Members to access the Renewable Energy stocks directory, water stocks, biotech stocks, defense stocks directories and the Insiders Corner

Cemargos acquired 100% of Ciments Guyanais, owned today by Lafarge and Holcim (50%-50%). Acquired assets include a clinker grinding facility with a capacity of 200,000 MT/year and a port, located in Degrad des Cannes, near Cayenne.

  • These assets have a EUR 8.1 mn (USD 11.2 mn) EBITDA - according to Cemargos’ press release - which reflects a 6.2x EBITDA multiple for the transaction. This multiple seems attractive relative to cement companies’ forward multiples (LatAm average: ~9x 2014E) and the Honduras transaction (8.5x).
  • The transaction reflects a capacity multiple of USD 345/MT which seems rich, as CAPEX for a cement (only grinding) expansion project stands at ~USD 100/MT; however, we highlight that this multiple does not take into account the port facility.
  • With this acquisition, Cemargos will become the leading supplier in the French Guiana. We highlight that the French Guiana has a cement consumption (per capita: 433 kg/year) that is almost 2x the average cement consumption in LatAm (per capita: 253 kg/year) and Colombia (per capita: 226kg/year). This economy is highly dependent on gold mining, the Guiana Space Center in Kourou (French), and recently eco-tourism.
  • This acquisition is consistent with Cemargos’ expansion strategy and it’s within the region that they have defined as strategic: the Caribbean (including the northern part of South America), Central America and Southeast USA. Hence, we initially deem this acquisition as positive given paid multiple, high cement consumption in Guiana and synergies with the Surinam and Antilles operations, but noting that there is still further information – especially regarding profitability of the assets - to be revealed by Cemargos.
  • Finally, we highlight that Cemargos’ net debt as of 2013 stood at USD 1.02 bn. In addition, by February 2014 the BoD had authorized acquiring an additional USD 600 mn in long term debt with HSBC, partially to fund the Florida transaction (USD 720 mn) and probably to fund this new acquisition as well, although particular funding of the Guiana transaction has not been confirmed with Cemargos. Thus, with net debt around ~USD 1.6 bn, net debt/EBITDA would stand at 3.1x, which starts looking relatively high (vs. 2013: 2.0x).
  • The transaction is subject to regulatory approvals.

Regards,
Credicorp Capital

La información contenida en este mensaje es confidencial y para conocimiento exclusivo del destinatario. La información y opiniones contenidas en este mensaje pertenecen únicamente al remitente, excepto cuando en el cuerpo del mensaje se establezca lo contrario y el remitente esté autorizado para enviar dicha información con carácter definitivo y oficial de Credicorp Capital. La información relacionada con su cuenta, los extractos, informes financieros y de productos, sólo será vinculante en la medida en que sea remitida por los canales y en los formatos que Credicorp Capital determine. Las opiniones, conclusiones o cualquier otra clase de información contenida en este correo no relacionadas con los fines del negocio de Credicorp Capital, deben entenderse como personales y bajo ninguna circunstancia son avaladas por Credicorp Capital. Si usted ha recibido este mensaje por error por favor proceda a eliminarlo, y notificar al remitente. De cualquier manera, usted no debe usar, divulgar, revelar, distribuir, imprimir, copiar o adulterar en forma parcial o total este mensaje. Credicorp Capital no se hace responsable por la eventual transmisión de virus o programas dañinos por este medio. Credicorp Capital, no se responsabiliza por eventuales daños o alteraciones como consecuencia de la recepción o uso del presente mensaje.

More Info:

This news is published on the Investorideas.com Newswire and its syndicated partner network

Publish Your News - Send a release
News now!

Get free news alerts: Sign up here

Published at the Investorideas.com Newswire - Big ideas for Global Investors

Disclaimer/ Disclosure:The Investorideas.com newswire is a third party publisher of news and research as well as creates original content as a news source. Original content created by investorideas is protected by copyright laws other than syndication rights. Investorideas is a news source on Google news and Linkedintoday plus hundreds of syndication partners. Our site does not make recommendations for purchases or sale of stocks or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated by featured companies, news submissions, content marketing and online advertising. Contact each company directly for press release questions. Disclosure is posted on each release if required but otherwise the news was not compensated for and is published for the sole interest of our readers. More disclaimer info: http://www.investorideas.com/About/Disclaimer.asp

BC Residents and Investor Disclaimer : Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: http://www.bcsc.bc.ca/release.aspx?id=6894. Global investors must adhere to regulations of each country.



Free News Alerts
Email:  





TOP

Investor Ideas © 2000 - 2014 InvestorIdeas.com®, ECON

Sign up here

login | logout | about us | contact | disclaimer / disclosure |
advertise | company profile directory | partners / links |
job search | privacy policy | trade | services | sitemap |