Gonna' miss you MAXR... I'm out at $71.54 Cdn... A group of equity analysts on the Street downgraded shares of Maxar Technologies Inc. after private-equity firm Advent International announced Friday it will buy the satellite owner and operator for about US$4-billion.
“We view this transaction as highly favorable to Maxar’s investors, who are likely getting a much more attractive payout from PE than a defence prime would have offered in a difficult public market environment,” said Canaccord Genuity’s Austin Moeller. “Advent clearly sees the value of Maxar’s high-margin, cash-flow-generating Earth Intelligence business over the next several years, following the company’s successful collection of the NGA/NRO’s $3.24-billion EOCL imagery contract.
“We also expect that Advent should be able to achieve major synergies and increase market share within the lower-margin Space Infrastructure business in Palo Alto. Maxar will now have the resources to conduct some strategic M&A of NewSpace companies (many of which have seen valuations crumble in the current equity market/interest rate environment). We expect the new management to hone in on smallsat and satellite component manufacturing (in support of Maxar’s new 150 kg pLEO bus), in addition to EO data analytics and 3D mapping products to drive margin expansion and top-line growth in both the SI and EI businesses. The press release also implied that the transaction should enable construction of Legion units 7 and 8 to move to the left, which would directly benefit the Earth Intelligence segment and further open up the aperture on the constellation’s electro-optical imaging capacity.”
Mr. Moeller moved Maxar to “hold” from “buy” with a US$53 target to match the offer price, up from US$34.
Others making changes include:
* Baird’s Peter Arment to “neutral” from “outperform” with a price target of US$53, up from US$45.
* RBC’s Ken Herbert to “sector perform” from “outperform” with a US$53 target, up from US$30.
* TD’s Tim James to “tender” from “buy” with a US$53, up from US$34.