Atalian Memo 140220
- Understand why Atalian is capable of deleveraging, why its business is resilient cyclically and why we expect its cash conversion to be strong going forward
- Understand why priming risk is mitigated given our liquidity projections
- Atalian’s business segments and revenue streams
- Understand the key operating metrics of customer retention and related contract terms
- Understand the impact of changes in labour regulations in France (CICE)
- Understand the rationale behind the Servest acquisition and its year-to-date impact on the consolidated profile
- Understand the Facility Management market and its various business segments
- Understand the sector outlook in the major regions of Europe, APAC and North America
- Understand Atalian’s position in the sector and in key geographies
- Understand the comparable peers set for Atalian, their relative valuation multiples and performance through the cycle
- Assessment of whether management’s strategy to de-lever by end-2021 is achievable
- Applying a region-wise wage inflation likely to be seen in the next 5 years and its impact on EBITDA generation
- Stressing Atalian’s customer retention rates, new business wins and labour cost to assess its resilience
- Valuing Atalian’s equity with base and stress DCF calculations and comparables multiples
- Can Atalian turn around operations to achieve its stated 8%-8.5% EBITDA margin target?
- How have cleaning and facilities management services companies performed in downturns?
- What is the potential for priming and why do we believe this risk is mitigated?
- How would Atalian’s financials and liquidity look if its planned capital raise fails and in our stress case?
- Which is the right Adj EBITDA definition for Atalian – company reported “recurring” and “reference recurring” EBITDA or an alternative?
- What is the long term impact of the Servest acquisition and has Atalian overpaid for it?
- What is the impact of Brexit-related economic slowdown on Servest UK’s operations?
- View, Variant Perception & Recommendations
- Business Overview
- Industry Overview
- Group Structure & Capitalisation
- Historic Financial Analysis
- Everest Base Case - Financial Projections & Valuation
- Everest Stress Case - Financial Projections & Valuation