INVESTMENT FIRM One51 will shortly have funds at its disposal to spend more than €250 million on new acquisitions after the conclusion of six deals in Ireland, Britain and Canada in recent months, according new research by Davy stockbrokers.
One51, led by financier Philip Lynch, declined to disclose its expenditure on such deals. These include the purchase of a 33 per cent stake in Ontario-based recycling firm Global Electric Electronic Processing Holding last October, and the purchase of Cavan-based plastics extrusion firm Foamalite in December.
One51 bought recycling firms Howarth and Howcan Metals in north-west England in January and in March it bought out Ampthill Metal Company of north London and Anywaste Solutions in Kent. In April it acquired AAC Plastics in Staffordshire. Davy believes One51 still has €200 million of available debt facilities at its disposal after the transactions. It also says the firm stands to receive some €60 million from a liquidity event at NTR, the utility group in which it has a 25.38 per cent stake.
"Given that net debt stands at less than 25 per cent of enterprise value, One51 has plenty of scope to drive investment-led growth in its core environment services division and to continue to make investments across its portfolio (including renewable, infrastructure and food) for anticipated value upside," the broker says.
"The expected distribution from NTR after its sale of Airtricity will amplify its investment spending power. It also has other cashable holdings in its portfolio."
One51 shares currently change hands on a grey market at €5, but Davy suggests the current "equity value" of the stock is in the region of €6.19. "We estimate One51's total enterprise value at €1.05 billion, an uplift of 26 per cent on our September 2007 valuation. Less estimated net debt of €240 million, this implies a current equity value of some €810 million or approximately €6.19 per share."
The shares were listed at €5.75 in October on a grey market run by Davy and closed their first day of trading at €6, implying a valuation of €714 million on One51.
Davy says the firm has been "active" since then with investment activity, and says the development of discrete management and reporting structures in its business units will improve its efficiency. "Environmental services, the group's key earnings before interest, tax, depreciation and amortisation (EBITDA) and cash flow division, has added a number of significant acquisitions which extend its scope and geography.
"We estimate that this division now has an EBITDA run-rate of circa €55 million, a near-fivefold increase since 2006. Current market valuations would put an enterprise value of over €550 million on this activity, representing half of the estimated group enterprise value." The other 50 per cent is represented by investments in NTR, Open Hydro, Irish Continental Group, Greenore Port and Irish Pride Bakeries. "Some of these investments may not remain permanent within its portfolio, but some could become strategic and core," Davy says.
