Q: Good Morning
What are your thoughts on the big buy made in the US?
THKS
Marcel
What are your thoughts on the big buy made in the US?
THKS
Marcel
5i Research Answer:
It is a pretty big move between both the acquisition and the US listing and gets BYD back into growth mode. The deal adds 258 locations in the Southeast US and management expects the deal to be accretive to earnings and margins after the first full year. The deal is getting done at 13.3X EBITDA which looks reasonable. BYD is also doing a bought deal financing at $141 US or roughly $197 Canadian, a bit of a discount to current prices but markets seem to like this deal and are sending shares higher. This looks like a pretty good deal to us and gives BYD a new platform to grow through in the US and should come with some synergies over time.