Strategic Focus of Piraeus Group on IDEAL Holdings
The Piraeus Group is currently focusing on the strategic development of IDEAL Holdings, aiming for a share price target of 8.5 euros per share, with an upside potential of 42% and an Outperform recommendation. IDEAL Holdings has evolved into its current form through various acquisitions and divestments since 2021, with holdings in the IT sector (through BYTE and Adacom) and the department store sector (through Attica Department Stores).
The company aims to acquire strong majority stakes, up to 100%, in companies with healthy finances, as part of its strategic growth plan. This strategic focus reflects the group’s commitment to expanding its portfolio and enhancing its market position in key sectors.
Unlocking Value and Growth Potential
When it comes to financial metrics, the key is to focus on creating companies with sustainable growth potential. This can be achieved either organically or through acquisitions, in order to build companies of sufficient size that will be able to attract the next investor and provide value to shareholders.
Investment Opportunities in Greece
Based on current data, Greek companies that are being invested in have opportunities for organic growth as well as growth through add-on acquisitions. There are prospects for establishing a strong presence in fragmented sectors. The focus is not on specific sectors but on businesses, and as long as the strategic plan has already outlined the path to success.
Investment Company Specializing in Mid-sized Companies
Our company focuses on businesses with a net worth ranging from 70 million euros to 300 million euros. Through our extensive network, we are able to conduct transactions independently, without participating in auctions or public bids. This allows us to make deals at fair valuations.
Leading in the Investment Sector
It is worth noting that Piraeus AEPEV is the third company in line covering IDEAL Holdings, following Eurobank Equities and Pantelakis Securities. IDEAL Holdings’ Investment Team is mentioned, which has so far recorded impressive success in the sector.
Impressive Performance and Future Prospects
IDEAL Holdings has a remarkable track record, having invested around 250 million euros so far with a recorded IRR of 58% and a MOIC (Money on Invested Capital) of 2.9x. With this data in mind, it is estimated that the approximately 130 million euros that IDEAL Holdings will have available after the official completion of the sale of its industrial sector (Astir&Coleus) will create additional value for its shareholders.
For the company’s valuation, the report uses a combination of DCF (Discounted Cash Flow) and LBO (Leveraged Buyout) methods. Reference is made to the strong financial performance and potential growth opportunities that lie ahead, making IDEAL Holdings an attractive investment option for investors looking for long-term returns.
Analysis of Two Industries
According to Piraeus, the company has evaluated the Information Technology and Department Stores sectors, and described their dynamics. Piraeus has used forecasts lower than those of management, and with some assumptions, the target price can range from €8.5 to €10.6 per share.
Specifically, Piraeus estimates the value of the Information Technology sector at €172.4 million or €3.6 per share, and the Department Stores sector at €148.4 million or €3.1 per share. This analysis is based on the cash available from the sale of the industrial sector.
Changes in Ideal Holdings Board of Directors
The Ideal Holdings Board of Directors recently made an important decision during their meeting on July 10, 2024. They voted to change the role of the Board President, Mr. Lambros Papakonstantinou, from a non-executive member to an executive member.
This decision was made after careful consideration of the company’s financial situation. With a cost of 8.5 euros per share, taking into account the removal of borrowing costs, maternal costs, and transaction costs, the Board aims to strengthen leadership and drive growth in the company.
