FLEX to Spin-Off its Cloud & Power Infrastructure Business in a Tax-Free Transaction Targeted for Completion in 1Q 2027

On March 5, 2026, after the market close, Flex Ltd. (NASDAQ: FLEX), a global manufacturing company, announced plans to spin off its Cloud & Power Infrastructure business into a separate, publicly traded entity via a tax-free separation that is expected to be completed in 1Q 2027, subject to customary conditions (although we note the transaction was unanimously approved by the Board). In terms of post-spin management, SpinCo will be helmed by FLEX’s current chief executive (CEO), Revathi Advaithi, while Michael Hartung, FLEX’s current president and chief commercial office (CCO) will take the reins at RemainCo.

Beyond the standard rationale of increased management focus, more optimized capital allocation frameworks as well as improved investor targeting, the separation broadly represents, in our view, the separation of a high-growth provider of system-level digital & electrical infrastructure for mission-critical power distribution & thermal management solutions, with applications in both artificial intelligence (AI) data centers as well as utilities, among others and a more-established manufacturer operating across diversified end markets. In that context, management has anecdotally indicated the expectation for SpinCo to generate top-line growth of 65%-75% in F2027 with an acceleration to 80%-plus in F2028 as well as a long-term secular growth opportunity amid wide-spread investment in digital infrastructure (amid AI adoption). On the other hand, post-spin FLEX (or RemainCo) will remain positioned as a leading global manufacturer serving the healthcare, auto, smart communications and connected lifestyle markets, albeit with a slower growth profile and a seemingly keen focus on capital returns.  In that context, management projects that post-spin Flex’s top-line growth profile will durably be in the “low-to-mid” single digits with incremental margin expansion & cash flow generation opportunities that will facilitate a “robust capital return framework”. Anecdotally, while the aforementioned dichotomy suggests that RemainCo is likely to garner a heavier debt load (in the interest of providing SpinCo with the flexibility to pursue growth opportunities), management indicates that both post-spin entities will be “well-capitalized with robust balance sheets”.  

Prior to this announcement, FLEX operated two segments: 1) Flex Agility Solutions (or FAS), which represented ~55% of consolidated sales in F2025 and garnered a segment operating margin of ~6.1% (up from 4.8% in F2024); and 2) Flex Reliability Solutions (FRS), which comprised the remaining 45% of sales and generated a 5.8% margin (compared with 5.3% in F2024), but moving forward will report under 1) Cloud & Power Infrastructure (i.e., SpinCo), which posted ~38% top-line growth in F2026 to $6.6 billion with adj. operating income of ~$610 million (or a ~9.2% margin); and 2) Flex (i.e., RemainCo), which itself will be comprised of two segments, Integrated Technology Solutions ($11.1 billion of sales and a adj. op. margin of ~5.4%), which will primarily serve the communications and lifestyle markets, and Regulated Manufacturing Solutions ($10.2 billion of F2026 sales and a adj. EBIT margin of ~6.0%), which will focused on the automotive, industrial and healthcare sectors. For context, on a consolidated basis, in March-ending F2026, the company posted 8% net sales growth to $27.9 billion with adjusted operating income of $1.76 billion (on a margin of 6.3%) and adj. EPS of $3.30 (compared with $2.65 in F2025). Adj. free cash flow was $1.06 billion. In terms of guidance, for F2027, management projects net sales of $32.3-$33.8 billion, implying 18% growth at the midpoint, with an adjusted operating margin of 7.0%-7.1%. Adj. EPS is expected to be $4.21-$4.51, implying growth of 32% at the midpoint, based on an adj. tax rate of ~21%. FCF conversion is expected to be ~60%, based on a capital spending budget of ~$1.4-$1.6 billion.

In terms of valuation, the most relevant peers for RemainCo could include Celestica Inc. (NYSE: CLS), Benchmark Electronics (NYSE: BHE), Plexus Corp. (NASDAQ: PLXS), and Sanmina Corp. (NASDAQ: SANM), which trade at a median blended forward EV/EBITDA multiple of ~15.5x while SpinCo could be imperfectly compared with Advanced Energy Industries (NASDAQ: AEIS), Broadcom Inc. (NASDAQ: AVGO), and MKS Inc. (NASDAQ: MKSI), which trade at a forward EV/EBITDA multiple of ~20x.  Applying the peer multiples to F2027E/F2028E EBITDA, respectively, implies segment values of ~$39 billion and ~$21.25 billion, respectively. Accounting for projected net debt yields a preliminary sum-of-the-parts valuation of ~$58 billion or ~$156 per share (based on a diluted share count of ~370 million).

Close Coverage of TRS, effective as of today’s market bell, with the sale of its Aerospace business completed in March 2026 and shares trading roughly in-line with our fair value estimate (FVE)

For context, shares of TriMas Corporation (NASDAQ: TRS) appreciated ~54.5% (outperforming the S&P 500 and Russell 2000 indexes by ~16% and ~18.5%, respectively) since our most recent recommendation/initiation in March 2024.

That said, with shares trading roughly in-line with our $39 per share base case fair value estimate and the sale of its Aerospace business completed in mid-March 20226 we prefer to maintain a disciplined approach and withdraw coverage of TRS, effective as of today’s market close.

Recall, in November 2025, TRS agreed to sell TriMas Aerospace which produced highly engineered fasteners, bolts, rivets, screws, and machine parts for the aerospace industry under brands including, among others, Monogram, Allfast, Mac Fastners, RS, Weldmac, Martinic and TFI Aerospace, to Tinicum L.P. (with Blackstone as a minority investor) for $1.485 billion, implying a purchase price of ~18x trailing-twelve month EBITDA.  More recently, the transaction received approval from EU regulatory authorities and ultimately closed on March 16, 2026.

As always, we will continue to monitor the shares for an opportunity to re-recommend if valuation shifts or other potential strategic alternative options materialize. 

NPKI modestly tops consensus in 1Q 2026 & raises the high-end of full-year 2026E guidance; announces plans to invest an incremental $40-$45 million toward a ~50% expansion in manufacturing capacity, which should come on-line in mid-2027; fair value estimate increased to ~$17.50 per share

Last night, after the market close, NPK International (NYSE: NPKI) reported 1Q 2026 results with sales from continuing operations up ~16% to $75.1 million (versus consensus of $73.3 million), driven by strength in demand for rentals of its core-composite matting products (particularly among utility & critical infrastructure customers), which were up ~20% to $52 million during the March-quarter. Adj. EBITDA increased ~14% to $22.5 million (compared with consensus of $20.6 million) while adj. EPS were $0.12 (compared with consensus of ~$0.11 and $0.11 in the prior year period).

The company ended 1Q 2026 with net debt of $4.0 million (compared with ~$12 million at the end of 2025), including ~$6.5 million of cash and ~$11 million of debt.  During the quarter the company repurchased 0.2 million shares for $2.7 million.  [Recall, during 2025, NPKI repurchased ~4% of its shares (at an implied price of ~$6.70 per share), as well as completed the $42 million acquisition of U.K.-based Grassform, which operates a composite mat fleet of ~20,000 (and generated ~$2 million of sales in 4Q 2025), in late-November 2025.]

On the longer-term capital allocation front, management indicates that given the health of its balance sheet (and durability of its demand outlook) the company will continue to return capital to shareholders, invest in expanding its current matting fleet (where the cash-on-cash returns have historically been ~25%-plus) as well as evaluate small tuck-in acquisitions within its core critical infrastructure markets. 

In that context, the company announced its intention to invest $40-$45 million over the next five quarters to expand its manufacturing capacity by ~50%, which should begin to come online in mid-2027.  To be sure, this level of incremental spend, albeit a long-term good/necessity, is likely to cause a degree of near-term investor angst we would note that, on this morning’s conference call, management downplayed the medium-term impacts on either financial returns (i.e., ROIC) or utilization (and that the additional capacity likely sets the company up to support solid growth through the end of the decade).

In terms of guidance (see Exhibit 1 on page 2), management raised the high-end of its full-year 2026E outlook, which now calls for sales of $310-$325 million (previously $305-$325 million and compares with prior consensus of $316 million), implying ~15% year-over-year growth at the mid-point, with adj. EBITDA of $92-$102 million (up from $88-$100 million and compared with consensus of ~$92.5  million), implying ~28% growth.

Full-year 2026E capital expenditures are expected to be $75-$90 million (up from $45-$55 million), including $30-$35 million of the incremental manufacturing capacity investment aimed at capitalizing on what management describes as a “a multi-year capital cycle” for its utility customers as well as “sustained market conversion from timber to composite”.  (Notably, on this morning’s conference call management anecdotally indicated that composite solutions currently have ~25% market share with timber & stone remaining the dominant, albeit legacy, solutions, in our view.)

Our base case fair value for NPKI (formerly NR) moves to $17.50 based on a 13.5x multiple of 2027E adjusted EBITDA and accounting for projected net debt.  [Note: NPKI changed its corporate moniker from Newpark Resources (old ticker NR) in December 2024 following the sale of its Fluid Systems (or oil field services) business and, subsequently, in late-May 2025 changed its Global Industry Classification Standard (GICS) classification to Industrials/Capital Goods/Trading Companies & Distributors (from oil field services).]

PCS Research Group welcomes and encourages your feedback.  Please feel free to call us if we can be of service.

Close Coverage of Post-Spin Qnity (Q) with Shares Trading Roughly In-Line with our FVE, Effective as of Today’s Market Close

For context, following our initial BUY rating shares of post-spin Qnity Electronics (NYSE: Q) appreciated 48.5% (outperforming the S&P 500 and Russell 2000 indexes by 44% and 36%, respectively).

That said, with shares trading roughly in-line with our current $140.50 per share (see Exhibit 3 on page 3) fair value estimate (FVE) as well as the span of time that has elapsed since the company’s tax-free separation from DuPont de Nemours (NYSE: DD), which was completed on November 1, 2025, we will drop coverage, effective as of today’s market close. 

Simply for reference, for full-year 2025, consolidated sales rose ~10% to $4.75 billion with adj. EBITDA up ~11% to $1.4 billion.  Adj. EPS were $3.35 (versus $2.98 in 2024).

On the guidance front, for 2026E, management’s initial guidance (see Exhibit 1 on page 2) calls for consolidated sales of $4.97-$5.17 billion along with adj. EBITDA and EPS of $1.465-$1.575 billion and $3.55-$3.95, respectively.  Free cash flow is projected to be $450-$550 million on a capital spending budget of ~$450-$470 million (or ~9% of consolidated sales).   Q’s Board has also approved a $500 million repurchase program (representing ~2% of the outstanding shares at current price levels).

In terms of the medium-term financial outlook (i.e., 2025E-2028E; see Exhibit 2 on page 2), Qnity targets compound annual organic growth of ~6%-7%, or roughly 200 basis points above the underlying market,  driven by share/content gains, a higher-value mix shift toward areas such as semiconductor fabrication (or “semi fab”) consumables, advanced packaging & interconnects as well as thermal management, along with an adjusted EBITDA CAGR of ~7%-9% (see Exhibit 2 on page 2). 

Please see The Spin-Off Report dated October 8, 2025 and Updates from 10/16/2025, 11/3/2025, 11/6/2025, 1/15/2026 and 2/25/2026 for more information.

GTX tops consensus in 1Q 2026 and raises the high-end of full-year 2026 guidance w/ the mid-point of its FCF outlook implying a 10.5%yield; still sees the non-auto business ramping in 2027 with Industrial E-Cooling solutions comprising >5% of total sales by 2030; FVE increased to $23.50 per share

This morning, before the market open, GTX reported 1Q 2026 sales up 12% (or ~6% on a constant currency basis) to $985 million (versus consensus of ~$913 million) driven by continued share gains in the light vehicle gasoline space as well as increased in-roads into the commercial vehicle (both on- & off-highway) and industrial sectors. Adj. EBITDA rose ~15% to $183 million (on 50 bps of margin expansion to 18.6%) while adj. free cash flow (FCF) was $49 million. GAAP net income improved 53% to $95 million (on a margin of 9.6%, up 250 bps) while EPS were $0.49 (versus consensus of $0.41).

On the capital allocation front, GTX repurchased an additional $87 million worth of its stock during the quarter (and has $163 million reaming on its full year authorization, representing ~4% of the outstanding total shares).  Additionally, the company maintained its $0.08 per share quarterly dividend payout to shareholders (which, we note, was increased from $0.02 per share in 3Q 2025).

At quarter end, GTX’s net leverage ratio was 1.92x (compared with 1.92x at the end of 2025 and 2.21x at the end of 2024); notably, the company has no significant debt maturities until 2032.  The company’s near-term leverage target remains ~2.0x (as it is balanced against its commitment to returning ~75% of adj. free cash flow to shareholders).

In terms of guidance, the company raised the high-end of its full-year 2026E outlook (see Exhibit 1 on page 2), which now calls for total sales of $3.6-$3.9 billion (previously $3.6-$3.8 billion) with adjusted EBIT of $520-$600 million (versus prior guide of $520-%570 million). GAAP net income is expected to be $300-$360 million (up from $295-$335 million). Cash flow from operations is projected to be $407-$522 million (previously $407-$502 million), resulting in adj. free cash flow (FCF) of $355-$475 million (compared with the prior outlook of $355-$455 million).  [Note: at the midpoint, management’s FCF outlook implies a current yield of ~10.5%, by our calculation; see Exhibit 2 on page 2). For context, GTX’s revised guidance is based on underlying macro assumptions that are broadly unchanged from what was discussed on the 4Q 2025 conference call.

Recall, looking into 2027, the company recently announced the launch of a strategic collaboration with Trane Technologies (NYSE: TT), a global HVAC supplier that was spun-off from Ingersoll-Rand and merged with Gardner Denver in an RMT transaction in 2020, to integrate GTX’s “next generation, oil-free, high-speed centrifugal compressors” into TT’s HVAC offerings ranging from “unitary rooftop and modular chillers to large capacity chillers”, which incorporate products/technologies originally developed by GTX for automotive applications (i.e., high-efficiency turbomachinery, oil-free bearings, high-speed electric motors, ultra-high frequency inverters & model-based control software) but that are now being further utilized in a wider range of industrial applications (i.e., data centers).

In terms of tangible results, early testing suggest GTX’s solutions can help TT generate/offer “real world energy savings” of more than 10% (as compared with incumbent solutions).  On the financial front, management expects the collaboration to ramp moving into 2027 and could ultimately comprise ~5% of total revenue by 2030 (with activities being immediately accretive upon production).

More recently, on this morning’s conference call, the company noted inroads into both E-Powertrain solutions, particularly in China, as well as a “significant” production award from Tonfy, a China-based battery energy storage player, for its E-Cooling Compressor products, which should contribute looking into 2027.

All told, GTX endeavors to generate ~$1 billion in so-called “Zero-Emission” sales by 2030 (at stable corporate margins); in that context, the company intends to hold an Investor Day on May 20, 2026 to “provide additional updates on our long-term strategy and outlook”.

Our base case fair value estimate for GTX is $23.50 per share, reflecting a 9.0x multiple on our 2028E adjusted net income forecast and a fully diluted share count of ~161 million (see Exhibit 3 on page 3).

LXFR reports 1Q 2026 results; modestly raises full-year EPS guidance and indicates a material acceleration to “robust double-digit earnings growth” looking into 2027; fair value remains $16.50 per share

Last night, after the market close, LXFR reported 1Q 2026 consolidated sales, ex-Graphic Arts, down ~7.5% to ~$84 million (versus consensus of $84.5 million) with adjusted EBITDA up ~9% to $12.3 million (compares with consensus of $11.5 million).  Adj. EPS increased ~17.5% to $0.27 (versus consensus of $0.20).

The company ended the March quarter with net debt of ~$43 million, including ~$15 million of cash and debt of ~$58 million, and a leverage ratio less than 1.0x.

In terms of financial guidance, management raised its full year 2026E guidance calling for consolidated sales of $355-$370 million (compared with the prior outlook of $350-$370 million and consensus of $360 million) with adjusted EBITDA of $52-$56 million (versus the previous guide of $50-$55 million and consensus of ~$50 million).  Adjusted EPS is projected to be $1.12-$1.22 (up from $1.05-$1.20 and compared with consensus of $1.12) while adj. free cash flow (FCF) is still expected to be $20-$25 million (see Exhibit 1 on page 2).

Anecdotally, looking into 2027E management indicated that given favorable end market trends (along with improving visibility), particularly in defense and aerospace sectors, as well as its internal cost/operational initiatives, including plant consolidations, the company expects to drive “robust double-digit earnings growth” in 2027.

Additionally, the company also remains cognizant that the Gas Cylinders and Elektron businesses have “no material synergies” and it is committed to continuously evaluating market conditions for opportunities to unlock value.

Our base case fair value estimate for LXFR remains $16.50 per share, reflecting a ~9.0x multiple on 2026E adj. EBITDA as well as projected net debt (see Exhibit 2 on page 2).

KOG Completes the Spin-Off of Kongsberg Maritime; Initially Rate Both Spin Entities at NEUTRAL

On April 22, 2026, after the market close, Kongsberg Gruppen ASA (KOG NO) completed the tax-exempt demerger of its Maritime business, Kongsberg Maritime, which will begin trading as a standalone concern on the Oslo Stock Exchange under the ticker KMAR NO as of today, April 23^rd.  Shareholders of record received shares of each entity on a one-for-one basis (with no cash consideration). [Note: based on last night’s closing price, the reference prices, used as a technical guide for initial trading, were set at NOK 307.20 and NOK 67 for RemainCo and SpinCo., respectively, implying a roughly 82%/18% split, in terms of equity value.]

The separation effectively disentangles two businesses with fundamentally different economic characteristics, enabling a clearer alignment among strategy, management focus, capital allocation, and valuation. Post separation, Kongsberg will emerge as a more focused defense & advanced technology platform, while Kongsberg Maritime will operate as a standalone, somewhat more cyclical marine solutions provider. More specifically, Kongsberg Maritime, for its part, will be positioned as a leading provider of advanced marine systems with exposure to offshore-, naval-, and merchant- end markets. While supported by a sizable installed base and stable long-term demand trends, the business remains decidedly more cyclical/lumpy as well as capital-intensive (as compared to the former parent), with valuation upside likely to be more gradual/execution dependent, particularly in regard to operating leverage-driven margin expansion, an improving aftermarket mix, and the normalization of standalone cost structures, which will be key to driving incremental value over time rather than as a significant near-term re-rating catalyst. By contrast, RemainCo will retain Kongsberg’s Defence & Aerospace and Discovery businesses and emerge as a more concentrated defense platform, aligned with structural growth drivers such as rising global defense spending and increasing demand for advanced systems (e.g., missiles, air defense/drones & combat solutions). To be sure, strong backlog visibility, long-cycle contracts, and high barriers to entry support a more resilient earnings profile and justify a premium valuation relative to peers.

Clearly, given the share price performance post spin announcement, where shares advanced ~58% (compared with the a ~26% advance in the Oslo All-Shares Index), there has been a degree of pull-forward in terms of the re-rating process, particularly, as we see, at RemainCo, which obviously represented the bulk of the pre-spin equity value.  That said, the market, at this juncture, does seem to be pricing-in a premium multiple looking out to 2030E forecasts.  All told, on a post spin basis, we value RemainCo at NOK 324 per share and NOK 71 per share, respectively.  Given the implied upside to our forecasts, we initially rate both post-spin entities, Kongsberg Gruppen (KOG NO) and Kongsberg Maritime (KMAR NO) at Neutral (see Exhibit 1).   

In terms of near-term trading dynamics, given the obvious disparity in equity values (~NOK 285 billion versus ~NOK 62.5 billion), and KOG’s inclusion in, among other the OBX Index as well as the OBX Industrials Index, as well as our sense that investor appetite likely skews toward RemainCo’s defense positioning (as opposed to pure-play maritime exposure), a degree of shareholder rotation could be expected (Note: Folketrygdfondet at ~5.35%, BlackRock, Inc. at ~3.50%, and Must Invest AS at ~2.53% are the company’s top “independent” shareholders).  That said, a notable mitigating/stabilizing factor in our view is the Norwegian government which, via the Norwegian Ministry of Trade, Industry & Fisheries, holds a controlling stake of approximately 50.004% and has indicated its intent to maintain its current stakes in post-spin KOG and KM.  For its part, Kongsberg Maritime was added to the S&P Europe 350 and the S&P Euro Plus indices as of today’s market open (replacing Zealand Pharma).

ABF to Separate its Retail Business, Primark, from its Food Business via a Dividend Demerger that is Expected to be Completed by the end of 2027

On April 21, 2026, Associated British Foods plc (ABF LN) announced that following a strategic review, which began in November 2025 (when the company was added to The ESS Monthly Situation Monitor), the company intends to separate its Retail business, named Primark (or SpinCo), from its Food business (or FoodCo). The transaction, which is supported by majority shareholder Wittington Investments (who intends to maintain its position in both entities), is expected to be completed via a dividend demerger by the end of calendar 2027, subject to customary conditions.  (While the ultimate deal structure may evolve these types of demergers are generally aimed at being a tax-neutral event for shareholders.)  Both companies are expected to trade on the London Stock Exchange and remain components of the Financial Times Stock Exchange (FTSE) 100 index.

Currently, ABF operates five segments: (1) Retail (Primark) (49% of 2025 revenue), a fast-growing international value clothing and fashion retailer in Europe; while its Foods business is comprised of (2) Grocery (21% of 2025 revenue), a global food business division comprising a wide portfolio of international and regional brands; (3) Ingredients (11% of 2025 revenue), comprising bakery ingredients, along with specialty value-added ingredients primarily focused on enzymes, precision extraction, health and nutrition and pharmaceutical delivery systems; (4) Sugar (11% of 2025 revenue), comprising a range of sugar and other products from sugar cane and sugar beet in Africa, UK and Spain; and (5) Agriculture (8% of 2025 revenue), comprising an international agri-food business producing specialty feed ingredients, premix & compound animal feed alongside an integrated dairy business in the UK.

While these food divisions provide earnings diversification and strong cash generation, their growth and return profiles contrast sharply with Primark’s expanding international footprint and superior returns on capital.  In that context, the divergence in segment performance was notably stark in 2025 (and seemingly prompted management’s review of its group structure) with Retail segment sales growing ~1% year-over-year while the Grocery and Ingredients divisions saw revenue declines of 3% and 4%, respectively. The Sugar division experienced a sharper 10% revenue contraction driven by weak European sugar pricing while Agriculture revenue fell by 1%, reflecting lower joint-venture contributions and one-off costs.

On the Retail front, Primark remains one of the largest and fastest-growing clothing retailers in Europe and the market leader by volume in the UK. In 2025, the business operated 473 stores (currently 486) with ~19.5 million square feet of selling space across 17 countries, reflecting its continued international expansion efforts. As mentioned earlier, Primark delivered another year of solid financial performance in 2025 with revenue increasing to £9.6 billion (from £9.4 billion 2024). Profitability remained strong with an adjusted operating profit margin of 11.9% (versus 11.7% in 2024) and a return on capital employed (ROCE) of 19.1% (compared with 18.7% in 2024). Overall, Primark’s sales grew 1% during the year with its store rollout program contributing 4% to sales growth, supported by continued progress in key expansion markets across Europe and the US, albeit partially offset by a 2.3% decline in like-for-like sales, reflecting softer operating conditions in some of its more mature markets.

On the Food side, sales at Grocery fell ~3% to £4.125 billion (versus £4.24 billion in 2024) with an operating margin of 11.6% (compared with 12.1% in 2024) and a return on capital employed (ROCE) of 31.5% (versus 35.8% in 2024) while Ingredients posted a ~4% top-line decline to ~£2.04 billion (versus £2.13 billion in 2024) with an adj. operating margin of ~12.6% (compared with 10.9% in 2024) and an ROCE of 17.9% (versus 16.9% in 2024).  At Sugar, sales fell 12% (or 10% on a constant currency basis) to £2.05 billion (versus £2.32 billion in 2024) with an adj. operating margin loss of -0.1% (compared with a 9.1% gain in 2024) and a similar return on capital employed (ROCE) versus 10.9% in 2024 while at Agriculture sales were down ~2% (or ~1% on a constant currency basis) to £1.6 billion (versus £1.65 billion in 2024) with an adj. operating margin 1.6% (compared with a 2.5% in 2024) and a ROCE of 4.8% (versus ~8% in 2024).

In terms of guidance, ABF expects group “adjusted operating profit and EPS to be below last year”, reflecting relatively challenged trends at both the Retail and Food segment trends.  By segment, at Retail, management expects 4%-5% top-line growth, driven primarily by new store openings, with an operating margin of ~10% (down from 11.9% in 2025) while at Food management expects operating profit ay Grocery, Ingredients & Agriculture to be “moderately below” 2025 levels while Sugar is expected to deliver an operating loss in 2026 (compared with previous commentary suggesting the potential for a small profit on an annual basis).

On valuation, the most relevant peers of ABF’s Retail segment are Hennes & Mauritz AB-B SHS (HMB SS), Industria de Diseno Textil (ITX SM), Next PLC (NXT LN), OVS SpA (OVS IM) and Lindex Group OYJ (LINDEX FH), which trade at a median 2026E EV/EBIT multiple of 14x. Applying this multiple to the segment’s 2026E EBIT of ~£1.075 billion implies an enterprise value of ~£15 billion. Meanwhile, the packaged food business, which constitutes the Ingredients and Grocery segment could be compared to Tate & Lyle PLC (TATE LN), Nestle SA-Reg (NESN SW), Corbion NV (CRBN NA) and Danone (BN FP) while the Sugar and Agriculture segments could be compared to Suedzucker AG (SZU GR), Genus PLC (GNS PLC) and Schouw & Co (SCHO DC).  Applying the overall group average of ~11x to 2026E EV/EBIT to the segment’s 2026E EBIT of ~$525 million yields a value of ~£5.5 billion.

After accounting for a net debt of ~£3.0 billion as well as minority interests & pension liabilities, the preliminary sum-of-the-parts equity value amounts to roughly £16.0 billion or ~£22 per share.

Close Coverage of BOS, effective as of today’s market bell

We close coverage of AirBoss of America (TSE: BOS), effective as of today’s market close.

As always, we will continue to monitor the shares for an opportunity to re-recommend if valuation shifts or other potential strategic alternative options materialize. 

Close Coverage of RICK, effective as of today’s market bell

We close coverage of RCI Hospitality Holdings (NASDAQ: RICK), effective as of today’s market close.

As always, we will continue to monitor the shares for an opportunity to re-recommend if valuation shifts or other potential strategic alternative options materialize.