In line with expectations, Kety
has finalized acquisition of 85% of Metalplast Zlotow from the State Treasury, a major Polish producer of fixtures and fittings used in aluminium joinery. The acquisition price is PLN 29.4m, which gives valuation of 100% of MZ at PLN 34.6m and 2006 P/E ratio of some 49x. In 2006 MZ had sales of PLN 36.5m, EB
ITDA of PLN 3.8m and net profit of PLN 0.7m.
Our view: Given the high historical P/E ratio (much higher than the 10x paid 15 months ago for Aluprof) we could expect some negative trading impact. In our opinion, one should not put too much attention of historical figures as we expect the company, as a State owned, to have been under invested and not efficient. We believe that the acquisition will be strategically positive for Kety
and should be value accretive in the long term.