NoHo Partners: Expansion to Switzerland through acquisition and a positive profit warning - Nordea

NoHo Partners announced today acquisition of Swiss premium burger chain Holy Cow! with 2023E EV/operational EBITDA multiple of ~5.3x. Transaction is expected to be completed during Q3 2023 with around EUR 2m one-off transaction costs. Acquisition will be made through a new company, Better Burger Society (where NoHo will have 53% ownership), which will acquire 76% ownership in Holy Cow! with EUR 24m. As a result, the company updates its guidance and now expects around EUR 380m sales (from previously above EUR 350m) and approximately 9% EBIT margin (intact). NoHo expects Holy Cow! to have around EUR 40m sales and around EUR 6m operational EBITDA in 2023. In 2022, Holy Cow! had CHF 38.8m sales and CHF 2.2m EBIT (roughly 5.7% EBIT margin) and it has 16 restaurants with intention to open several new units during the coming 12-months. Given slightly lower EBIT margin in Holy Cow!, it appears that NoHo’s underlying business has developed above earlier guidance. We however note that this has been well expected by post-Q1 Vara consensus modelling EUR 370m sales and 9.5% EBIT margin in 2023E.