Merger with Chr. Hansen a 'possible distraction' to Novozymes growth story - JPM

Chr Hansen Holding A/S

12/12/2022 09:33

** J.P.Morgan says a merger with Chr. Hansen  CHRH.CO  is a
"possible distraction" to Danish food ingredients and enzymes
maker Novozymes'  NZYMb.CO  growth story
    ** Novozymes and Chr. Hansen have agreed to merge, with
shares in Novozymes down around 10%, while Chr. Hansen jumping
around 25% at 0921 GMT
    ** "Our initial impression from this transaction from
Novozymes perspective is more cautious, especially given we
think Novozymes' standalone growth profile was very compelling,"
JPM says
    ** The brokerage points to high valuation for Chr. Hansen's
shares and some execution risks
    ** JPM calculates the implied EV/FY22A EBITDA of 21x,
compared to Chr. Hansen's long-term EV/EBITDA of 20.3x
    ** "This will likely be considered to be very expensive
initially by the market especially given the synergies targets
also seem more on optimistic side," JPM says
 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))