Lagercrantz: Acquisition machine with an edge

Initiating Coverage

2015-06-01

15:14

The attached file is an English translation of our initial research report of Lagercrantz and full-year update, as of May 8th. No changes to estimates or valuation have been made since. During the past ten years, Lagercrantz has moved from being mainly dominated by its trading businesses to having a significant share of proprietary product companies. Profitability has steadily improved and also created the basis for international expansion. Lagercrantz has an acquisition strategy that has proved to be extremely successful. It manages to buy companies that are stable, profitable and with a strong position in their niche. Moreover, acquisitions are also made at reasonable prices, as a rule 4-6 times operating profit. With some 40 subsidiaries and continued expansion in the longer term, the share offers very attractive exposure to successful Nordic small companies. However, after the past year’s strong market rally, we only see a limited potential for the share at present.

HA

Henrik Alveskog

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