Kloeckner Pentaplast Memo 271119
- Understand the business and its key drivers – exposure to raw material costs, in particular to polymer prices
- Industry overview – main private and public competitors and comparative financial and operational performance
- Understand the acquisition of LINPAC in 2017 – rationale, expectations and integration developments
- Understand the main historic corporate events with a focus on the 2017 refinancing, when the Term Loans (TL), RCF and PIK-Toggle Notes were issued
- Understand the capital structure and the TL, RCF and PIK-Toggle Notes debt instruments
- Historic financial analysis from 2014
- Understand the relationship between pricing of the debt instruments and the prices of raw materials with detailed market analysis on the main polymers
- Base and bear case forecasts to understand liquidity and refinancing risks in plausible scenarios
- Detailed DCF, trading comparables and comparable transactions valuations
- Recovery rate analysis for TL and PIK-Toggle Notes
- Return analysis considerations on a possible investment
- Detailed liquidity (and full financial) analysis with sensitivities to: revenue & EBITDA contraction potential; shocks to days payable outstanding (DPO), days sales outstanding (DSO) and days inventory outstanding (DIO)
- Plastic packaging M&A transactions and EV / EBITDA multiples
- Detailed valuation analysis – DCF, peer multiples and M&A transactions
- Estimation of cash flow sweep impacting ability of PIK-Toggle Notes to receive cash vs PIK coupons
- Under what circumstances would the Term Loans and PIK-Toggle Notes experience loss relative to today’s prices?
- What is the EBITDA potential of the business?
- How big is the equity cushion in our base and bear cases and across a range of valuation methodologies?
- How does Kloeckner Pentaplast’s financial performance compare with competitors and peers?
- How are key polymer prices developing and what is our outlook for these?
- View, Variant Perception & Recommendation
- Business Overview
- Industry Overview
- M&A - LINPAC Acquisition
- Historic Financial Analysis
- Group Structure & Capitalization
- Trading Update - Earnings Release Q2 2019
- Base Case Forecasts
- Bear Case Forecasts
- Valuation - Comparable Transactions
- Investment Considerations
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