Innofactor - Favourable offer received
A tender offer was made for Innofactor’s shares, with the offer price set at EUR 1.68, which we consider favourable for shareholders in the current, more challenging market situation.
Tender offer at EUR 1.68 per share
Onni Bidco Oy on the 22.7. announced a voluntary recommended public cash tender offer for Innofactor’s shares. Behind the consortium is investment company CapMan Growth, Innofactor’s CEO Sami Ensio through the holding company Ensio Investment Group Oy, and co-investor Osprey Capital Oy. The offer price is EUR 1.68 and represents a premium of 49.3 percent compared to the trading day preceding the announcement. The offer period is expected to commence and expire on or about August 5th, 2024 and September 16th, 2024, respectively.
Offer appears attractive considering market situation
The offer price appears quite good when comparing the on our estimates implied 2024e valuation (P/E ~ 16x), corresponding to peer multiples and some 25% above Innofactor’s own valuation during the past three years. 2024 figures are, however, partially weakened by the one-off legal expenses incurred in Q2. With the market situation still remaining challenging and the pan-nordic strategy not having developed as intended, more recently with considerable challenges in Denmark, the short-term prospects of the offer favours current shareholders. On an adjusted basis, Innofactor is still pretty near the top of proven profitability levels, and potential improvement at current would be on the slower side.
HOLD (BUY) with a target price of EUR 1.68 (1.40)
A competing bid is very unlikely, as CEO Sami Ensio is due to the conditions set in the tender offer committed to the offer unless a competing offer with a price of over 100% is made. Furthermore, according to the CEO, the company has reviewed several options in the past. We adjust our target price to EUR 1.68 (1.4) and lower our rating to HOLD (BUY).