TASTE

Mytaste Group

Research note

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myTaste: New cornerstone investors enter

On October 16, myTaste announced that the company received SEK 4.5m more in subscription commitments. Investors now have committed a total of SEK 10.3m, corresponding to 57% of the rights issue. Among the new investors are Cherry founders; Per Hamberg and Lars Kling, and also Chairman Fredrik Burvall and Board member Patrik Christiansen.

57% of the ongoing share issue is now secured through subscription commitments. The rights issue is vital as the proceeds will be used for already announced and future purchases of companies within the Shopello segment. So far, the company has announced three acquisitions; Outletsverige, alltidrea, and Kampanjjakt. The initial cash purchase price for the three acquisitions corresponds to just over 11 MSEK, now covered by the new and earlier cornerstone investors.

The rights issue is essential because the acquisitions will boost the underlying sales levels and earnings considerably.  We expect that the three new companies will increase the Group’s annualized income by roughly SEK 23m and add about SEK 12m to the EBITDA on an annual basis.Those numbers can be put in contrast to the fact that the myTaste Group had net sales of SEK 44m and an EBITDA of SEK -1.5m during 2016. Our Estimated fair value in Base-case amounts 7.8 SEK per share. Our fair value range is wide and stretches from 2.8-17.4 SEK per share. By this, we want to signal that the potential is indeed significant but also that the company has to prove that the new growth strategy is working.

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