Stella Pack: Price and Value Deal of the Year

With conservative guidance for 2023 not including its sizing Under the acquisition Stella Packcame back yesterday before Institutional investors manage it Sarantis Groupafter nearly five years of risk-free predictions.

For 2023, it expects sales to grow by 7.8% to €480m, mainly due to volume growth, with net profit rising to €28.44m from €26.27m in 2022. It also expects margins to grow by 18.4% in level earnings before interest, taxes, depreciation and amortization. to 11.2% from 10.2% in 2022 as a result of the marked easing of inflationary pressures, particularly in raw materials and packaging materials.

For the same reason, the EBIT margin is expected to increase to 8.3% from 7.2%, respectively. The company has budgeted the cost this year due to the acquisition of Stella Pack, around 2 million euros. According to powergame.gr information and calculations, the value of the deal is estimated at 50 million euros. Part of the group’s liquidity will be used to finance it, around 60-65 million euros in total.

The transaction is expected to increase the parent company’s earnings per share. In particular, it is expected to have an impact on EBITDA earnings in 2023 of approximately €1 million and an additional €2.5 million in 2024.

It is the deal of the year for Sarantis Group, which is awaiting approval from the Polish Competition Commission. It is noteworthy that Stella Pack is a Polish company that produces food packaging, waste bags and cleaning tools, with a turnover of 73 million euros and an EBITDA value of 8.5 million euros in 2022.

The completion of the deal has been delayed by several months compared to the original schedule, but “no surprises are expected,” according to Eleni Pappas, head of investor relations and corporate communication at Sarantis Group, who noted that the acquisition of the local brand Luksia in 2019 was completed within 8 months. -10 months. It is also estimated that the Stella Pack agreement will close in the second quarter of 2023.

This is an indicative project in terms of the synergies the group is seeking with the acquisitions it is promoting, at an operational, supply chain, production and business operations level. It should be noted that Stella Pack is the second largest player in the Polish market, where Sarantis Group is also present through Polipak. Both units are controlled by local subsidiary Sarantis Polska and produce similar products. So, the synergies are great. So the management of the Greek group is considering improving procedures. It should also be noted that Stella Pack also has a business in Romania, where Sarantis Group is “exploring” a new acquisition of a local brand from the Home Care category.

the Kostas Rozakias, Deputy Managing Director and Chief Financial Officer of Sarantis Group, She also indicated the group’s performance in the first quarter of 2023, where there was growth of more than 20% or like 17%, considering that Easter falls earlier this year. It notes the easing of cost pressure, part of which had to be absorbed in 2022, in order for the company to maintain its competitive advantage and not lose its market share.

Regarding the expected reduction in prices, to the extent that costs will be reduced horizontally, he indicated that this will be indirect and will be implemented through promotions and offers.

Finally, it is noted that for 2023 the investments will be conservative and are not expected to exceed 3-4 million euros, where the interest is focused on the completion of the acquisition of Stella Pack and on the negotiations of the pending acquisition of a new brand in Romania.

The group’s management promised to create shareholder value through organic growth, acquisitions and cash flow reinvestments, while maintaining a firm interest in the southeastern European markets in the two main product categories of the group’s portfolio: cosmetics, where it controls 15%-20%; of the market and home care products, leading the category, while also developing a business in private label products, which corresponds to approximately 10% of its turnover.