CapMan - Full focus on core business

Divestment of CaPS for EUR 75m
CapMan on October 4th announced the divestment of services business CapMan Procurement Services (CaPS) for a debt free purchase price of EUR 75m. CaPS’ turnover in 2023 amounted to EUR 10.2m and operating profit to EUR 5.9m. CapMan currently holds 92.7% of the shares in CaPS. CapMan expects the transaction to close on October 31st. The transaction is expected to have an EUR 0.33 positive impact on 2024 EPS and an EUR 60m immediate cash flow impact. CapMan’s BoD expects to propose a dividend of EUR 0.14 per share to the AGM in 2025.

Further focus on core business 
The divestment of CaPS was in our view to be expected. The transaction price was slightly on the lower side compared with our expectations but still fully reasonable. The proceeds will partly be used to decrease IB debt, given the lowered earnings capacity, but also to boost the core business and enable strong dividend distributions. In the short term, the impact of the transaction is somewhat negative given the loss of a highly profitable and growing business compared with the cost of CapMan’s IB debt. CapMan has solid potential in using funds from the divestment to scale the core business and significantly increase earnings. We see a quite high likelihood of growth through M&A in the short term, as the current organic growth pace is insufficient in terms of plans to reach AUM of EUR 10bn around 2027.

BUY with a target price of EUR 2.2 (2.3)
Following the change in earnings and net debt, considering near-term multiples for CapMan group, the impact on our estimates is fairly neutral. The earnings mix, however, becomes slightly more volatile and with a limited outlook into efficiency of the use of the proceeds we lower our TP to EUR 2.2 (2.3), BUY-rating intact.