Buying Helicopters N.Z. LtdThe deal was announced today to purchase New Zealand's largest helicopters business.
The purchase price C$120mm is six times the EBITDA of HNZ.
CHL.A has a market value of $248mm which seven times its own EBITDA.
Positive prospects of the deal:
- the sale price multiple to EBITDA is cheaper than the multiple on CHL's own shares. = VALUE
- the purchase will be financed with cash and debt rather than issuing shares. = NON DILUTIVE
- the deal is accretive to earnings and cash flow = POSITIVE
- the dividend policy will remain in place = STABLE
- the NZ business fills in the softer quarters of CHL's year
- financing is arranged and at the ready
Overall it seems to be a good decision that is good for shareholders of CHL.