The Shares Researcher

Roughly three weeks ago, the chairman and CEO, Massimo Zanetti, who indirectly holds ~68% of the company made a voluntary offer to acquire all outstanding shares for a price of €5.00 per share. While this lifted the share price from below €4 to now €5, this still doesn’t come close to the fair value we assigned to the shares. However, since the offering party already owns the majority of the shares, it seems rather unlikely that either the deal falls through or that there will be an adjustment in the offering price. When the first blog entry was made this January, it was expected that the opposite will happen: a further sell down of the majority stake to third party investors to turn this into a ‘real’, stock market listed company. Now they will become a fully private entity again. On the bright side, there are still many great value plays in Europe where the sale proceeds can be allocated to. New stock ideas will follow in due course.   Current Price €5.00 per share

Intro La Doria is an Italian listed company and is a leading producer of tomato-based products, pulses-vegetables, ready-made sauces and fruit juices. With its more than 60 years of history, La Doria is the number one producer of peeled and chopped tomatoes in Italy and number one for private label canned tomatoes in the UK. Biggest clients are, amongst others, Tesco, Sainsbury’s, Lidl, Carrefour, Coop and Walmart. La Doria is currently boosting its production capacity, especially for ready-made sauces and cans, but also for tomatoes and pulses. This expansion plan will have total costs of approx. €125 million in the years from 2018 to 2021. It is estimated that after this investment program, CAPEX will be reduced significantly which will lead to an even stronger free cash flow generation. The founding family (Ferraioli) still holds around 63% of the shares, with the remainder being free float. Valuation Back in 2011, revenue stood at €484 million with an EBITDA of €31 mi...

Intro Massimo Zanetti is a world leader in the production, processing and marketing of roasted coffee, distributed in around 110 countries. The company, headquartered in Italy, operates 18 facilities across Europe, Asia and the Americas, and has a global network of around 400 coffee shops in 50 countries. Massimo Zanetti has been a consolidator of its market and is purchasing constantly smaller competitors, as was the case in 2018 with the acquisition of the Australian brand ‘The Bean Alliance’ for around €21 million and Nutricafés S.A. as well as Segafredo Zanetti Worldwide Italia S.p.A in 2016 for €44 million. The chairman and CEO, Massimo Zanetti, indirectly still holds ~68% of the company following its IPO in 2015. Valuation In sum, Massimo Zanetti generates around €900 million in revenues per year. Historical net profits were in the area of €15 to 20 million, which is, compared to its current market capitalization of €203 million, a P/E of approx. 12x. As of Q3 2019, t...