Wavestone shares climbed over 5% on the Paris Bourse on Wednesday, boosted by the announcement of the acquisition of German company Q_Perior for 330 million euros.

The proposed merger aims to create a "European consulting champion" with "global reach", employing over 5,500 people, and targeting sales of one billion euros by 2025.

Founded in 1990, Wavestone currently employs over 4,400 people, with annual sales in excess of 530 million euros.

Q_Perior, for its part, employs some 1,410 people, with consolidated sales of 285 million euros.

The new entity would thus post combined annual sales of nearly 820 million euros, with a current operating margin of 12.4%.

In practice, the transaction would result in Wavestone acquiring 100% of the shares making up the capital of Q_Perior's parent company, on the basis of 321.9 million euros in shareholders' equity and 8.1 million euros in debt.

This firm price may be supplemented by an additional consideration of up to 35 million euros, contingent on the German company's future current operating income.

Wavestone plans to finance 79% of the transaction through the issue of new Wavestone shares at a price of 54 euros per share, i.e. a total of 4.7 million new shares to be acquired and held by Q_Perior shareholders.

In a reaction note, analysts at Stifel hail the "complementary" activities of the two companies, particularly in geographical terms.

The transaction is perfectly in line with our investment theory, which is based on the management team's impeccable track record in mergers & acquisitions and business integration", stresses the research firm, recalling in particular the successful takeover of Kurt Salmon in 2016.

Furthermore, "the parity in terms of valuation is not unfavorable to Wavestone shareholders", concludes Stifel.

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