The leading contender is...Premium Brand ! This could be a perfect ''buyer''
They make a lot of cash and the buyout could be announced the same day the Financial Report is issued.
The market is taking note this morning !
Desjardins Securities analyst David Newman expects Premium Brands Holdings Corp. (
) to deliver “strong” third-quarter results.
“We are looking for 3Q EBITDA of $87-million (vs consensus of $81-million) given a strong recovery across most channels (sandwich in QSRs, including Starbucks; meat snacks, premium and dry cured meats, and seafood in retail) and various initiatives gaining momentum, especially in retail, as well as previous acquisitions and more benign commodity costs (retail protein and seafood),” he said.
In a research report released Thursday, Mr. Newman also examined an Oct. 5 Globe and Mail report that said Premium Brands is a leading contender to acquire Clearwater Seafoods Inc. (
), suggesting it doesn’t fit “the typical profile” of a Premium Brands deal but emphasized “there are clearly some strategic benefits.”
“While a large potential deal ($1-billion), there are many ways to skin a fish, with PBH likely more interested in CLR’s processing and logistics operations vs harvesting (21 vessels), largely to lower its ongoing capex requirements and commodity-related volatility,” the analyst said. “Instead, we believe PBH could potentially partner with others, eg First Nations, for the harvesting assets. CLR could enable PBH to swim further upstream, leverage its growing distribution network, exceed its five-year seafood target ($1-billion in sales), enhance margins and drive synergies. Depending on the debt/equity split, the acquisition could be accretive by 7–17 per cent, and 7–10 points higher with synergies, by our estimate.”
After raising his 2020 and 2021 adjusted earnings per share projections to $2.85 and $3.97, respectively, from $2.72 and $3.79, Mr. Newman hiked his target for Premium Brands shares to $118 from $108, keeping a “buy” rating. The average on the Street is $109.11.
“Our Buy rating on PBH is premised on its ongoing resilience, as showcased during the pandemic, the recharged momentum of its recently launched programs, a cornucopia of growth opportunities across various channels, the benefit from recent and potential acquisitions, and a more benign commodity environment,” he said.