Having gained CFIUS approval on 20 December 2019, Avon has completed the $91m acquisition of 3M’s ballistic protection assets announced in August. We update our forecasts for the acquisition, consolidated from 2 January 2020. Our FY20 EPS estimate is enhanced by 5% and, allowing for the full $5m annual benefit of cost synergies, FY21e EPS increase by 20%. The resultant FY21e P/E rating of 18.1x represents a 20% premium to UK defence peers, which we feel is justified by the high returns, strong cash generation and consistent execution of the growth strategy.

03 Jan 2020
Avon Rubber - More Protection enhances EPS

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Avon Rubber - More Protection enhances EPS
Avon Technologies PLC (AVON:LON) | 2,040 510 1.2% | Mkt Cap: 617.3m
- Published:
03 Jan 2020 -
Author:
Andy Chambers -
Pages:
4 -
Having gained CFIUS approval on 20 December 2019, Avon has completed the $91m acquisition of 3M’s ballistic protection assets announced in August. We update our forecasts for the acquisition, consolidated from 2 January 2020. Our FY20 EPS estimate is enhanced by 5% and, allowing for the full $5m annual benefit of cost synergies, FY21e EPS increase by 20%. The resultant FY21e P/E rating of 18.1x represents a 20% premium to UK defence peers, which we feel is justified by the high returns, strong cash generation and consistent execution of the growth strategy.