Sectors > Top Reports > Atalian Memo 140220

Atalian Memo 140220

Atalian. Deleveraging Feasible. Resilient Business. Buy Senior Notes
PUBLISHED: 14 February 2020
PAGES: 124
SUBMARKET: Atalian, Top Reports, Top Reports,


Why Read?

  • 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

What’s New?

  • 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

Questions Answered

  • 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?

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