ACF – Morgans rates the stock as Add

The company will acquire Uni-span for $21.25m. Morgans estimates FY21 accretion of 29%. There is further upside likely if management can generate revenue synergies and/or exceed cost synergy expectations.

Uni-span is a Queensland-based provider of engineered formwork systems and scaffold hire. It also provides new equipment sales and industrial labour to complement its hire services to the energy, mining and industrial sectors.

Morgans maintains an Add rating and raises the target to $0.40 from $0.34. The company will fund the deal through expanded debt facilities.

Sector: Capital Goods.

Target price is $0.40.Current Price is $0.34. Difference: $0.06 – (brackets indicate current price is over target). If ACF meets the Morgans target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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