Belmond Ltd. (NYSE: BEL), a luxury hotel and travel operator, reports four distinct business segments: (1) Owned Hotels (86% of sales and 78% of EBITDA in 2016); (2) Owned Trains & Cruises (11% of revenue and 3% of EBITDA); (3) Management Fees (3% of sales and 9% of EBITDA in 2016); and (4) Earnings from Unconsolidated Companies (10% of EBITDA).

At less than 12x 2019E EV/EBITDA, BEL is undervalued relative to peers and the sum value of its diverse portfolio of one-of-a-kind assets. In recent years, the company has been monetizing non-core assets at premium valuations and executing on a growth strategy that targets adjusted EBITDA of $226-$256 million in 2020 (versus $128 million in 2016). As well, we would note that in 2007 and 2012, BEL garnered takeover offers from strategic players representing forward multiples of 21x and 17x EBITDA, respectively. Both offers were rejected as inadequate by the Board, which, because of a dual-class share structure, controls ~64% of the company’s voting power. Since that time, a majority of the Board has been replaced, and the company has a new CEO who has indicated to the shareholder base, which includes Starwood Capital, Southeastern, and GAMCO among the top 25, that the current dual-class structure is not “permanent.”

Considering our financial projections as well as peer, M&A, and asset valuations, value of $21 per share can be assigned to BEL’s Owned Hotel business, while its Owned Trains & Cruises could be valued at $1 per share. Management Fees and Earnings from Unconsolidated Companies could be valued at $4 per share. Accounting for corporate costs and projected net debt of ~$10 per share yields a base case sum-of-the-parts value of ~$16 per share. In a more bullish scenario, where previously offered takeout multiples are applied, value of $21-$26 per share could be derived.

Potential catalysts include the monetization of assets, execution of internal growth initiatives, the elimination of the dual-class share structure, and/or a strategic combination. Potential risks include a lack of execution, competition, leverage, currency fluctuations, geopolitical disruptions, natural disasters and/or a recession.

DXC Technology Co. (NYSE: DXC) in October 2017 announced its intention to combine its U.S. Public Sector business (“”USPS””) with Vencore Holding Corporation and KeyPoint Government Solutions—both of which are owned by affiliates of private equity firm Veritas Capital—to form a separate, independent publicly traded company via a tax-free spin-off. The transaction is expected to be completed by March 31, 2018. Based on an analysis of estimated F2019 revenue, EPS, cash flow, and dividend yield, a pre-spin sum-of-the-parts fair value estimate of $111 for DXC Technology can be derived. Post-spin, DXC Technology and Ultra SpinCo can be fairly valued at $90 and $24, respectively. Note that as of this writing, pro forma financials have not yet been filed for the spin entity, and therefore these estimates are preliminary and subject to revision as more information becomes available.

Matthews International Corp. (NASDAQ: MATW) reports three operating segments: (1) SGK Brand Solutions (51% of sales and 45% of adjusted EBITDA in F2017); (2) Industrial Technologies (8.5% of revenue and 5% of EBITDA); and (3) Memorialization (40.5% of sales and 50% of EBITDA).

Over the last several years, MATW has added scale to each of its businesses, largely via acquisition, and it could ultimately move to separate the businesses into two distinct entities, with Brand Solutions likely to be paired with Industrial, and with Memorialization as a standalone. The businesses have limited synergies, given distinct manufacturing footprints, and a separation could benefit longer-term operations with respect to growth, margins, and/or capital allocation. Moreover, an elimination of the conglomerate structure could allow investors to more easily evaluate the businesses as well as better target their investment dollars. In terms of stock performance, MATW trades near a 52-week low and the shares have lagged both the S&P 500 and Russell 2000 indexes over the last 1-, 3- and 5-year periods, which somewhat weakens the rationale for the current conglomerate structure, in our view.

Considering peer valuations and M&A multiples as well as management’s financial commentary, respective value of $35 per share, $11 per share, and $38 per share can be assigned to the SGK Brand Solutions, Industrial Technologies, and Memorialization businesses. Accounting for projected net debt of $19 per share yields a sum-of-the-parts value of ~$65 per share.

Potential catalysts include the separation of MATW’s core Brand Solutions and Memorialization businesses, accretive acquisitions, incremental synergy realization, share repurchases, and/or accelerating end-market demand. Risks include a lack of execution on internal initiatives, particularly acquisition integration, shifts in technology or consumer preferences, commodity and currency fluctuations, and/or a recession.

Above, please find The European Spin-Off & Restructuring Report  on Getinge AB (GETIB SS).

On October 18, 2016, Getinge AB (GETIB SS), a Swedish medical equipment company, announced its decision to spin off its Patient & Post-Acute Care (PPAC) business through a tax-free spin-off. Getinge shareholders of record as of December 8, 2017, will receive one series A share in Arjo for each share of series A Getinge. Series B shareholders will receive one series B share in Arjo for each share of series B Getinge. In total, 272,369,573 shares will be distributed, of which 18,217,200 will be series A and 254,152,373 will be series B. Each series A share entitles the shareholder to 10 votes, and each series B share entitles the shareholder to one vote at the general meeting. Arjo will trade on the Nasdaq Stockholm exchange under the symbol ARJO B for B shares.

On a pre-spin, sum-of-the-parts basis, shares of Getinge AB are estimated to have a fair value of SEK 130 per share, consisting of SEK 19 per share for Arjo and SEK 111 per share for post-spin Getinge. Given limited upside to the fair value estimate, shares of GETIB are not recommended for purchase prior to the transaction. Post-transaction, we would recommend caution regarding either side of the business, and prior to recommending shares of either post-spin entity, we would need to see a significant margin of safety to the fair value estimates.

The Brunswick Corporation (NYSE: BC) operates two distinct recreation-focused business segments: (1) Marine (78% of sales and 77.5% of EBITDA in 2016), which manufactures boats as well as marine engines and parts; and (2) Fitness (22% of sales and 22.5% of EBITDA in 2016), which produces fitness and strength training equipment, such as treadmills, stair climbers, exercise bicycles, and weights. The Fitness segment also includes a small billiards and game room furniture business that was retained following the divestiture of the company’s bowling businesses in 2014.

At roughly 6.5x 2019E EV/EBITDA and less than 12x 2019E P/E, BC is undervalued relative to the sum value of its parts, particularly the high-margin Parts & Accessories piece of its Engine business. In our estimation, near-term headwinds in the company’s Fitness and Boat segments have weighed on the company’s overall valuation, offering investors attractively priced exposure to a healthy marine market (as well as to favorable longer-term fitness trends). While we see ample opportunity for improvement in the Fitness and Boat businesses, we note that BC has shown a willingness to divest businesses if and when value could be created for shareholders.

Considering our financial projections as well as peer and M&A valuations, value of $62 per share and $13 per share can be assigned to BC’s Marine and Fitness businesses. Accounting for corporate costs and projected net debt of ~$6 per share yields a sum-of-the-parts value of roughly $69 per share.

Potential catalysts include the monetization of assets, improved end-market demand/new product launches, tax reform, increased capital returns to shareholders and/or the achievement of financial targets. Potential risks include competition/pricing pressure, currency fluctuations, and seasonality as well as a decline in consumer spending typically associated with an economic recession.

Above, please find the Bits & Pieces report for November 2017.

Delphi Automotive PLC (NYSE: DLPH) will separate its internal combustion-focused Powertrain business into a new, standalone publicly traded company, to be named Delphi Technologies PLC, via a tax-free spin-off. The post-spin parent company, to be renamed Aptiv PLC (“”APTV””), will be focused on vehicle connectivity, electrification, and autonomous driving. Delphi Automotive shareholders will receive one share of Delphi Technologies (New Delphi, or “”DLPH””) for every three shares of Delphi Automotive held as of the record date of November 22, 2017. The spin-off is expected to be effective at the close of business on December 4, 2017. Based on an analysis of estimated 2018 earnings, pre-spin shares of Delphi Automotive are fairly valued at $104 per share. Post-spin, shares of APTV and DLPH are fairly valued at $86 per share and $53 per share, respectively, with the post-spin DLPH fair value reflecting the one-for-three share distribution ratio.

On July 11, 2017, Consol Energy Inc. (NYSE: CNX) announced the filing of a Form 10 registration statement with the SEC for the tax-free spin-off of its Pennsylvania mining operations and other coal assets, to be named CONSOL Energy Inc. Following the spin-off, Consol Energy will change its name to CNX Resources Corporation but retain its current stock symbol on the NYSE (CNX).  Based on an analysis of estimated 2018 EBITDA and proven and probable reserves, a pre-spin sum-of-the-parts fair value estimate of $18 for CNX can be derived. Post-spin, CNX Resources Corp. (CNX) and CONSOL Energy Inc. (CEIX) can be fairly valued at $13 and $41, respectively– the latter based on approximately 28.8 million post-spin shares outstanding (1:8 distribution). With the implied fair value estimate representing 8% potential upside to CNX’s current share price ($16.57 as of this writing), the shares appear to be approaching a full valuation for the transaction. As such, pre-spin shares are not recommended for purchase.

The Madison Square Garden Company (NYSE: MSG) is a holding company controlling a broad range of entertainment assets, grouped into two distinct business segments: (1) Sports, which includes the company’s ownership of professional sports teams, most prominently the New York Knicks (NBA) and the New York Rangers (NHL); and (2) Entertainment, which presents, hosts, or produces live entertainment events, including concerts and shows, at a portfolio of owned and leased venues, including Madison Square Garden, Radio City Music Hall, the Beacon Theatre, the Forum, and The Chicago Theatre.

In our view, MSG trades at an attractive discount to the sum value of its diverse parts and possesses myriad options to unlock value for shareholders, including a separation of the Sports and Entertainment businesses, the monetization of certain assets, including minority investments, or even a go-private transaction. Notably, following the two-year anniversary of MSG’s spin-off from MSG Networks, which was completed on October 1,2015, the company is currently free to pursue any and all of its strategic options.

Considering asset, M&A, and peer valuations, value of $139 per share, $56 per share, and $25 per share can be assigned to MSG’s Sports teams, owned real estate, and Entertainment assets. Accounting for net cash of ~$56 per share yields a base case sum-of-the-parts value of roughly $275 per share, which implies ~25% potential upside. (Notably, our bull case valuation of $370 per share implies 65% upside, while our bear case of $220 suggests minimal downside.)

Potential catalysts include a separation of MSG’s Sports and Entertainment businesses, asset monetization, minority investments, an LBO, rising asset valuations, and/or share repurchases. Potential risks include changing consumer preferences, labor unrest, asset illiquidity, deterioration in asset valuations, significant insider ownership, and/or a recession.

Jack in the Box Inc. (NASDAQ: JACK) operates two distinct restaurant concepts: (1) Jack in the Box (73% of sales and 84% of EBITDA in F2016), which, with 2,255 primarily franchised locations in 21 states, is the fifth largest quick-serve hamburger chain; and (2) Qdoba Mexican Eats (27% of sales and 16% of EBITDA in F2016), which, with 720 owned and franchised locations, is the second largest Mexican-inspired fast-casual restaurant chain.

At less than 12x 2018E EV/EBITDA, JACK is undervalued relative to the sum value of its parts, particularly its highly franchised JIB segment. In that regard, the company recently indicated that it was working with advisors to evaluate options for its Qdoba business, which it acquired for $45.5 million in 2003. In our view, a separation would result in multiple expansion for JACK, which trades at a ~300-basis-point discount to the average of its highly franchised quick-service peers. As well, a standalone JIB could support a higher leverage profile, which would provide incremental capital (along with potential proceeds if Qdoba is sold as opposed to spun off) that could be returned to shareholders.

Considering our financial projections as well as peer and M&A valuations, value of $160 per share and $21 per share can be assigned to JACK’s Jack in the Box and Qdoba restaurant businesses. Accounting for corporate costs and projected net debt of ~$64 per share yields a sum-of-the-parts value of roughly $118 per share.

Potential catalysts include the spin-off or sale of Qboda, increased capital returns to shareholders, improved same-store sales trends, and/or the achievement of long-term financial targets. Potential risks include competition, operating cost inflation, inadequate food safety standards, changes in consumer preferences, elevated leverage, and/or a recession.