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  5. LNR: On 5/30 Lnr stated it acquires 3 battery factories for $325m. [Linamar Corporation]
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Q: On 5/30 Lnr stated it acquires 3 battery factories for $325m. Very negative market reaction as price dropped 4.5% to $60.10. Why?Please comment & explain. Add,Hold or Sell.Thanks for U usual great services & views
Asked by Peter on June 01, 2023
5i Research Answer:

Considering the EV sector is hot the reaction is a bit surprising to us. At $325M it is fairly large for the company, so some investors may worry about debt or a financing. But revenue and other financial metrics were not released. It will accelerate LNR's electrification shift, and was probably a 'necessary' purchase rather than building more of its own facilities. We would not change a positive view here overall, and would consider it buyable today at only 7X earnings.