BIC takes control of Cello Pens in India
NEUTRAL, Fair Value EUR91 (+4%)
Yesterday BIC announced the acquisition of the remaining 40% of the 7th entity of the Cello Group and the exercise of its call to increase its stake to 55%. These two operations combined represent a total investment of EUR76.2m. Based on our estimates, the integration of Cello Pens should have an accretive impact of ~4.5% on our 2014 normalised IFO and be slightly positive (+0.4%) on EPS. Pending the closing of the acquisition of the 55% stake by the end of 2013, we do not change our 2014-15 assumptions. Although we think that this acquisition should be a sales and margin enhancer, BIC will first need to appease its relationship with the founding Rathod family after three years of legal proceedings and mitigate the integration risk in a challenging Indian market.
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