SCISYS (LON:SSY) - Value-creating space bolt-on
Oct 31st 2012 - Edison Investment Research today published a report on SCISYS (SSY.L, LSE:SSY, LON:SSY) entitled "Value-creating Space Bolt-on". In summary, the report says:
SCISYS is doubling the size of its Darmstadt-based space consultancy business through the acquisition of a small but profitable German business for c €2m net of cash acquired. The deal, which is SCISYS’s first acquisition in five years, was satisfied in cash. In our view, the deal is attractive in both terms of valuation, at a modest c 4.5x FY11 operating profit, and strategy, as the deal gives the space consultancy business much more scale (c 12-15% of the enlarged group revenues) and a stronger foothold in certain key customers such as EUMETSAT and EUTELSAT. Also, the acquired business has higher margins and therefore we expect it to lift group margins.
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