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Sdiptech: Fast-growing M&A compounder - Nordea

Research 20200723

Sdiptech is an M&A compounder, similar to peers Indutrade and Addtech, with a focus on the infrastructure sector. It was listed in 2017 at SEK 56 per share. The start was a bit rocky, but after a string of acquisitions, the group is today not only more diversified but also much larger.

Its 33 business units generate annual revenue of SEK ~1.9bn. It aims to grow organic EBITA by 5-10% per year (8% in 2019) while adding another SEK 90m in EBITA through M&A (SEK 93m in 2019). Although the ongoing pandemic clouds the near-term view, as for most companies, we believe the focus on infrastructure will offer support.

Through a combination of DCF valuation and peer multiples, we set our fair value range at SEK 120-200 per share.
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