Sølvtrans transaction highlights underlying values in NTS

Aslak Berge

Sparebank1 Markets increases both estimates and recommendation after sky-high valuation on Sølvtrans acquisition.

On Monday afternoon the private equity fund Antin has bought the stock majority in the wellboat company, Sølvtrans. How much Antin paid for the company is not known, but investment bank, Sparebank1, speculate that company (including net debt) has been valued 15 times its EBITDA.

That sum hasn’t been confirmed by Sølvtrans or Antin.

Nevertheless; taking into account this assumption, the Sølvtrans trade indicates a major upside in the valuation of listed NTS, owner of the wellboat shipping company, Norsk Fisketransport, argued Sparebank1 analyst Tore A. Tønseth in an analysis published today.

“The high multiples seen in the Sølvtrans transaction highlights not only the upside in ((wellboat shipping company) Norsk Fisketransport (NFT), but also the relatively low implied valuation of (salmon farmer) Midt-Norsk Havbruk (MNH),” said Tønseth.

“We have made just minor changes to our estimate after the second quarter results, but set a 8x (6.5x) EV/EBIT multiple on the MNH operations and a more forward leaning 12x (9x) EV/EBITDA multiple on the well boat division. With a larger fleet and a global presence Sølvtrans should have premium to NFT, but the 15x EV/EBITDA (LTM) seen in this transaction shows the interest and willingness to pay for exposure to the aquaculture sector. We upgrade to Buy (Neutral) and set six-month target to NOK 63 (EUR 50), supported by a SOTP currently at NOK 63 (EUR 51).”

The NTS share jumped 3.5 percent on the Oslo Stock Exchange on Thursday, and was traded at NOK 59 (EUR 6).

Given Sølvtrans valuation on NFT and Lerøy valuation at MNH, the SOTP value of it is NOK 80 (EUR 8.1) per NTS share, Tønseth noted.


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