Mayne Pharma's sale of MCS division will leave it less profitable - Citi

MCS Services

11/08/2022 20:37

** Citi Research says Mayne Pharma Group's  MYX.AX  sale of
its Metrics Contract Services (MCS) division will leave the co
"much less profitable"; retains "neutral/high risk" rating   
    ** The speciality pharmaceutical co on Wednesday said it
will sell its MCS division to U.S.-based Catalent Inc  CTLT.N 
for $475 mln  urn:newsml:reuters.com:*:nL4N2ZM0KE
    ** MYX said it will receive ~$445 million in net proceeds
from the sale
    ** "Given the management's mixed M&A track record, the key
question for investors will be how the excess capital will be
deployed" - Citi
    ** Citi says MYX had few options but to sell its MCS
division, given its debt situation and ramp-up in operating
expenses needed to support launch of Nexstellis, MYX's oral
contraceptive pill 
    ** Says MCS is by far most profitable part of MYX and
expects it to generate ~78% of MYX's EBITDA in FY22 
    ** Two of four analysts rate the stock "buy" or higher and
two "hold"; their median PT is A$0.32 – Refinitiv data
    ** Stock up 27.1% YTD, as of last close

 (Reporting by Harish Sridharan in Bengaluru)
 ((harish.sridharan@thomsonreuters.com;))