Who will eat Cerved stews?
What happens in Cerved between rumors on the sale of the subsidiary Cerved Credit Management active in the NPL sector, scenarios on the aims of the funds on the rest of the group and the repercussions on the stock market for the Italian company's stock. Facts, numbers and analysis
What happens in Cerved?
Cerved flies to Piazza Affari, after yesterday the company confirmed the existence of negotiations for the sale of the subsidiary Cerved Credit Management active in the NPL sector.
Stocks stood at € 7.77, up 11.15%. Since the beginning of the year – notes the Radiocor agency – they have recorded numerous changes of direction, to the point that today, despite the strong rise, they are just above 7.45 euros at the end of 2020.
The group yesterday published a press release confirming that negotiations are underway to sell the subsidiary Cerved Credit Management Group, as part of the assessments relating to the enhancement of the Credit Management division. It has been specified that these are "negotiations without exclusivity constraints, with private equity funds".
According to press rumors, Cerved is in advanced talks with Centerbridge for the sale of the subsidiary, although Prelios and the private equity funds Apollo and Apax are also on the dossier. The valuation of the division, again according to rumors, would be in the order of 400 million.
"Although lower than the 450-480 million offered by Intrum before Covid, a valuation of 400 million would correspond to a ratio between ev and ebitda in the area of 6.5-7 times", commented the Equita experts, adding: " Despite the probable improvement in the NPL market context in the coming years, we believe that the sale of the division is the best solution for Cerved compared to a partnership with a third party or a future standalone, considering a certain defocusing from the business after the non-sale to Intrum ".
The analysts, taking into account the sale of the subsidiary, have revised upwards the valuation of Cerved. In addition, they considered that if the operation goes through, Cerved could become an interesting prey. 'We believe that the possible sale of the NPL division could increase the speculative appeal on the company ”, commented the analysts – according to MF – recalling that already in 2019 she was courted by Advent.
As mentioned, potential buyers have not been mentioned, but the Reuters agency has indicated the US investment company Centerbridge as the most active player and at the most advanced stage in the negotiations, starting from a valuation of about 400 million euros, substantially aligned with that included by the analysts in their sum of the parts of the group.
Among the private equity funds involved there are, apparently, also Apollo and Apax, while among the industrial players there would be Prelios. Centerbridge recently completed the exit from BFF, while Prelios, owned by Davidson Kempner Capital Management, would be looking to buy Cerved Credit Management to raise its valuation before Davidson Kempner decides to exit the company, possibly with an IPO on the Milan Stock Exchange.
Instead, Intrum would no longer be in the game after retreating last year at the start of the pandemic. The sectoral and macroeconomic context, in fact, did not appear favorable to a sale, on the other hand a strong recovery of the fundamentals of this division was not expected due to the strong competition that characterizes the sector and the delay in the formation and sale of new non-performing loans to follow-up of public support measures for businesses.
According to Reuters , the disposal of Credit Management could be the prelude to the sale of the entire Cerved group, which has long been on the radar of private equity funds (remember the offer of Advent in March 2019 at a price that, according to rumors, was equal to 9.5 euros per share).
The news is not a surprise – Mf pointed out – as it was known that Cerved had been looking for an exit from the Credit Management business for some time, but it is positive as the negotiations are already underway and there could be news in a relatively short time.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/chi-si-pappera-gli-spezzatini-cerved/ on Mon, 08 Mar 2021 10:23:38 +0000.