Sogefi title orbiting Piazza Affari. The shares of the company controlled by the De Benedetti family's Cir failed to make a price at the start and by mid-morning they rose by 31,22% to € 2,69 after the announcement of the 2023 accounts and, above all, of the sale of the filter division to an American fund. The parent company's stock also rallied Cir, which gains 6,8% to 0,51 euros per share.
Sogefi's 2023 accounts
Sogefi ended 2023 with a Net income of 57,8 million, almost doubled (+95,4%) compared to 2022. The revenues, rose by 1,6% to 1,6 billion euros, while the ebit it soars by 49,2% to 105,2 million. The free cash flow was positive for 37,9 million, while financial debt net fell to 200 million.
As regards the fourth quarter, revenues stood at 375,3 million (-2,4%), the ebitda was 47,5 million (+11,3%), the ebit was 16 million, while the net profit was 12 million compared to the negative result of 3,4 million recorded in the same period of the previous year. The board of directors will propose to the shareholders' meeting the distribution of a dividend of 0,20 euros per share.
Sogefi sells its filter division and the stock soars
But what pushed Sogefi shares above all was the announcement of the put option agreement signed with the US fund Pacific Avenue Capital Partners on the entire capital of Sogefi Filtration and Sogefi USA by virtue of which Carta France and Carta Us have undertaken "unilateral, unconditional and irrevocable" commitments to purchase, respectively, the entire share capital of Sogefi Filtration and Sogefi USA. The filtration division, explains a note, will operate under the name Purflux Group if the operation is completed.
The deal consideration is based on a enterprise value of 374 million euros, corresponding to an equity value, to be settled entirely in cash, currently estimated at approximately 330 million. The enterprise value implies a multiple of 0,65 times the 2023 turnover and 3,6 times the 2023 ebitda, a year in which the Filtration division achieved a record ebitda result, up 24% compared to 2022. Based on at the estimated equity value, the transaction would give rise to a capital gain of approximately 130 million.
Pursuant to the put option agreement, Sogefi granted the Carta Us and Carta France vehicles a period of six month exclusive to complete the operation.
Intesa: “A turning point for Sogefi”. And raise the target price
The news is “finally un real turning point for Sogefi”, comment the analysts of Intesa Sanpaolo, noting that the division's selling price is higher than the company's entire pre-announcement capitalization. The deal, the experts continue, "offers the company the opportunity to significantly strengthen the financial structure, pay extraordinary dividends, reduce the complexity of the group and focus on the two remaining high-potential businesses: Air and Cooling and Suspensions".
Furthermore, according to Intesa, which raised its recommendation on the stock to "buy" from "hold", the sale of the filters could lead to a better valorization of the remaining assets for a possible reorganization of the shareholding structure in the future.
The operation, again according to Intesa, is finally a real "game changer" for Sogefi, while according to Equity, the agreement is “very positive”. However, Equita also highlights some negative aspects, including the fact that "the filters had the highest free cash flow" and that "Stellantis' weight on turnover will now increase to "over 20%". “We have written several times in the past about M&A scenarios, but the timing takes everyone by surprise given that no one incorporated a valuation from extraordinary transactions,” the experts add.
Finally for Akros the news of the sale of the filter division is from crucial, given the good valuation implicit in the deal: he consequently raises the target price to 4,3 euros and maintains his buy recommendation on the stock.
