An opportunistic and strategic acquisition

Strix’s announcement of their conditional purchase of Billi is another example of the management’s ability to identify acquisitions that are both good value and make excellent strategic sense. The group has been eyeing the multifunctional tap market for some time. Not only does the merger widen the group’s product portfolio, but it additionally brings in new markets – not least into commercial offices. We also expect the strong cash flow from Billi to result in a rapid deleveraging of the Group. We note the Directors’ subscription in the placing, amounting to £0.37m.

Significantly, the merger presents an opportunity for targets in the Group’s five-year plan to be met a year early, but for now we conservatively hold our financial estimates and Fair Value per share, with the latter now at a significant premium to the current price.