CapMan: Divests service business CaPS for EUR 75m - Nordea

CapMan announced today that it has signed an agreement to sell its ownership of CapMan Procurement Services (CaPS) together with CaPS’ minority shareholders for EUR 75m, including EUR 5m earnout. CapMan’s ownership of CaPS is currently 92.7% and the deal is expected to close 31 October 2024. CaPS had EBIT of EUR 5.9m in 2023, and the full debt free purchase price corresponds to 2023 EV/EBIT of 12.7x (11.1x on our 2024E estimates, while CapMan was trading at 10.9x for 2024E on yesterday’s close price). CapMan will realise an immediate cash flow effect of EUR ~60m and plans to use the proceeds to grow the private asset fund management business, decrease interest bearing debt and enable strong dividend distribution during the coming years. CapMan’s BoD is expecting to propose a dividend of EUR 0.14 per share, while we had previously estimated EUR 0.11 per share for 2024. Based on our talks with the company, CapMan will focus its capital to its core strategy, growing the management company business and CaPS being non-core business would have required significant investments going forward (e.g. for further international expansion). We view the transaction positively as it allows CapMan to invest in the growth of its management company business and supports dividend payment.