Camplify Holdings: Expanding the camp

Author name:: By Steven Sassine
Job title:: Associate Analyst
Date posted:: 01 December 2022, 8:00 AM
Sectors Covered:: Diversified Financials

Post Camplify’s (ASX:CHL) EGM vote on its recently announced acquisition, we take a closer look at PaulCamper and the opportunities it should provide to the now global Camplify business.
Regarding the deal itself, CHL has entered into an agreement to acquire 100% of the shares of the Berlin-based RV marketplace for an acquisition consideration of €30.9m (~A$47.6m) to be paid via a combination of cash (A$1.8m) and scrip (~23.45m CHL shares valued at ~A$45.8m). With a dominant market position in Germany and a presence in The Netherlands, Austria and also the UK, the acquisition provides a substantial beachhead in Europe for CHL to expand from, in our view.
Post factoring in the acquisition, the scrip issuance and the accompanied capital raise we make several changes to our earnings estimates across our forecast period. Noting deal completion is likely early December-22, we have PC contributing predominantly from 2H23. Our DCF/multiples derived price target is now set at (login to view) on the above changes and an upward amendment to MorgansE RFR from 3% to 3.6%. Add maintained.

Camplify acquires PaulCamper

Post Camplify’s (CHL) EGM approval on its recently announced acquisition, we take a closer look at the Berlin-based PaulCamper business and the beachhead it now provides CHL to expand throughout Europe.

Founded in 2013, PaulCamper (PC) has become the leading peer-to-peer RV marketplace in Germany with a 92% market share. It also has operations in The Netherlands, Austria and the UK.

CHL will pay an acquisition consideration of €30.9m (~A$47.6m) via a combination of cash (~A$1.8m) and scrip (~23.45m CHL shares valued at ~A$45.8m). Concurrently, CHL had also announced a A$8.5m equity raise via an institutional placement (at A$1.70) across two tranches (A$3.5m as part of the first tranche, A$4.9m for the second tranche, subject to shareholder approval).

A A$2m SPP will also be launched.

Creates a solid foothold in Europe

The deal values PC at a €30m enterprise value. This equates to a ~4.2x EV/CY22F Sales acquisition multiple, whilst arguably full, we do note however the prodigious offshore opportunity this now creates for CHL to expand into (being now available in 7 countries).

We broadly agree with the strategic rationale for the acquisition, with management laying out a pathway to profitability and the potential synergies/product expansion that should result from the deal from FY24.

These include: 1) cost synergies of ~A$0.5m (from platform unification, scale in payments etc); 2) additional revenue opportunities from extending the Insurance business into becoming a MGA (higher margin), optimising the booking platform, building out the B2B capability of the TAP product and cross-selling products globally.

Forecast and valuation update

Post factoring in the acquisition, the scrip issuance and the accompanied capital raise we make several changes to our earnings estimates across our forecast period. With deal completion expected early Dec-22, only a modest contribution is factored in for 1H23.

We factor in some synergy benefits from FY24 as targeted by management. Our DCF/multiples derived price target is now set at (login to view) on the above changes and an upwards amendment to MorgansE RFR to 3.6% (from 3%).

Clearly this a significant acquisition for CHL and one that doubles the size of the existing business. Whilst not without integration risks, we believe the strategic rationale makes sense – allowing CHL to gain a solid foothold in Europe from which to expand from.

Investment view

CHL’s management team has shown an ability to build out a successful scalable platform, in our view.

Whilst still in its infancy and not without risk, we believe structural tailwinds supporting CHL and the prodigious opportunity offshore should provide longer term growth potential for patient investors. Add maintained.

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