Desjardins There is a low probability that a superior bid will materialize for Hroux-Devtek Inc. following the proposed takeover of the Canadian landing gear maker by American private equity firm Platinum Equity Advisors LLC for $32.50 in cash per share, said Desjardins Securities analyst Benoit Poirier.
“We view the offer price as reasonable, given (1) the longstanding Canadian discount vs U.S. players; and (2) the implied multiple is above HRX’s historical valuation. In view of key shareholder support for the deal and the Qubec angle (commitment to maintain HQ and operations in the province), which may be difficult for other potential buyers to replicate, we see a low probability of a superior bid,” Mr. Poirier said in a note to clients.
“We calculate that the purchase price represents multiples of 14.7x TTM EV/EBITDA and 11.5x our FY25 EBITDA estimate. While the offer price is below our pre-acquisition target of C$37, it is important to note that our target was based on a 12-month timeframe, we have the highest estimates on the Street for both FY25 and FY26, and the offer price is considerably above HRX’s historical valuation,” he said.
Mr. Poirier recommends shareholders tender their shares and he moved his price target to C$32.50 to match the deal.