Banco Sabadell: According to press reports, Laboratorios Rovi (ROVI) could obtain between €3,100 million and €3,700 million (73% capitalisation and EV of ROVI’s total; there is no data on what it represents in terms of the group’s EBITDA today) for its third-party manufacturing business (CDMO). The valuation would be based on the application of a multiple between 12x and 14x EV/EBITDA to the €261 million of EBITDA that the division is expected to reach in 2024. The proceeds from the divestment could be used to diversify into new businesses. The process would have already been launched and would have attracted the interest of Advent, Cinven, KKR, Pay or Permira.
Assessment:
Positive news if confirmed. Rovi’s intention to sell its CDMO division was already known and the valuation multiples are in line with expectations. However, the valuation range mentioned in the article exceeds the amount that had been rumoured (around €3 billion) due to a higher expected EBITDA for the division (€261 million in 2024). We note that this 2024 EBITDA for the division is higher than our expectations for the company as a whole (€249m and consensus €245m), which could be due to the impact of carving out the division and, we believe, the contribution of new contracts not yet announced. Although we expect a positive reaction, we believe that the share price is already reflecting the good prospects of the CDMO business (+52% in 2024; +41% versus IBEX).
