Prospective investors in Tegal Foods were yesterday considering the estimated value of the company ahead of its plans to float on the Australian and New Zealand sharemarkets.
DataRoom reported that Deutsche analysts estimate Tegel’s market value sits between $NZ628m and $NZ704m, while Goldman Sachs analysts have opted for a slightly higher range of $NZ628m to $NZ790m.
These estimates are about nine to 10 times the company’s forecast earnings before interest, tax, depreciation and amortisation for 2017.
As the Business Spectator points out, Tegel benefits from import restrictions in New Zealand and holds a dominant position in that market.
According to the AFR, potential investors will also need to consider factors like the low cost of feed in recent years which has benefitted Tegal and the notion that the company may have already hit peak efficiency after being twice-owned by private equity companies.
Another important factor is the company’s potential for export growth into Australia as well as Asia.