Helloworld: Highly accretive acquisition
About the author:
- Author name:
- By Belinda Moore
- Job title:
- Senior Analyst
- Date posted:
- 14 August 2023, 7:00 AM
- Sectors Covered:
- Agriculture, Food & Beverage, Travel and Chemicals
- Helloworld (ASX:HLO) has acquired Express Travel Group (ETG) for ~A$70m. Given their similar business models, this acquisition makes strategic sense. The price paid is attractive, there are material synergies on offer, it is highly EPS accretive (~30% upgrades) and significantly scales HLO’s ANZ business. Post transaction, HLO’s balance sheet remains strong.
- Despite the sale of Corporate, earnings will be higher in the future given recent acquisitions and structural improvements made to the business during COVID.
- Following this acquisition and assuming a full recovery from COVID, we now value HLO at (login to view) per share. We maintain an Add rating.
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