Italy’s chip player Technoprobe defies market drop

FormFactor

08/02/2022 11:16

(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
    MILAN, Feb 8 (Reuters Breakingviews) - Italy’s Technoprobe
is challenging choppy markets. Falling technology sector
valuations have made investors nervous about new stock market
listings  urn:newsml:reuters.com:*:nL8N2UF280. That’s not discouraging Chair Cristiano
Crippa, who is seeking https://www.technoprobe.com/wp-content/uploads/2022/02/20220203_Technoprobe-started-the-process-for-the-admission-to-listing-on-Euronext-Growth-Milan-3.pdf
 an equity valuation of up to 3.8 billion euros in a Milan
listing next week. The group is one of the few large makers of
devices that use thousands of tiny needles https://www.technoprobe.com/technologies-and-products/what-is-a-probe-card
 to test microchips’ soundness. That’s a sweet spot: Europe
wants to pump 50 billion euros into the sector to host 20% of
global chip production by 2030.  
    So far, Technoprobe’s bet seems to pay off. Its offer
was fully covered on Monday  urn:newsml:reuters.com:*:nL8N2UI1ZQ, ahead of book closure.
Sensible valuations are helping. At the top of the IPO range,
and including 140 million euros of estimated net cash, the
company’s enterprise value is nearly 18 times EBITDA of perhaps
200 million euros next year, Breakingviews calculations
show. That’s a premium versus the 15.2 times of listed
competitor FormFactor  FORM.O , but it reflects an
EBITDA margin of 45%, twice that of its U.S. rival. Investors’
response implies confidence that the chip boom will continue.
(By Lisa Jucca)
    
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 (Editing by George Hay and Oliver Taslic)
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