Blue Cap is set to benefit from recent potentially transformative deals. The projected turnaround of Neschen may yield a step-change in profit, while the disposal of Biolink on a chemical industry-leading multiple confirms the success of management’s exit strategy. Otherwise, a strong, coherent business model is evident in a solid financial record and outlook. Indeed, current consensus forecasts appear not to reflect adequately the general improvement in trading and this virtual de-gearing; adjusted 2017e EV/EBITDA of under 7x ignores the proven corporate success and increasingly ambitious investment.
