Leonardo wants to sell the former Oto Melara to a European player and the trade unions Fim, Fiom and Uilm have organized an assembly for today (from 10:30 to 11:30 and from 14:30 to 15:30) to protest against the alleged sale of the group’s defense systems business unit. The protest was organized following the rumors that for some months have signaled the intention of the company, led by Alessandro Profumo, to sell the activities of the historic company from La Spezia.
At the beginning the rumors pointed to Fincantieri as a possible buyer, more recently rumors have circulated about European industrial realities. According to the trade union, giving up the division to European subjects would mean losing “a highly strategic sector, one of the main suppliers of the Italian armed forces” which employs 1,500 direct and indirect workers.
Oto Melara produces naval guns and cannons / turrets for land platforms, and was merged into Leonardo’s defense systems division in 2016. The group does not provide economic data for each individual unit. The most recent ones that Banca Akros found indicate that Oto Melara reported revenues for
356 million euros in 2015 with an ebit of 38 million (EBIT margin of 10.7%) and revenues of 390 million euros in 2014 with an EBIT of 46 million (EBIT margin of 11.8%).
“We believe the business is doing well as Oto Melara has won major tenders for the supply of naval guns to many navies, including Canada and Spain in recent months; prospects are also improving in India after the country removed Leonardo from the blacklist a couple of days ago and Oto Melara is expected to win a major order for the supply of 13 naval gun systems for the navy “, underlined Banca Akros according to which there are not many listed European competitors around that can evaluate the acquisition of this Italian company.
Thus, Bae Systems trades at around 1 times its 2021 sales and around 10 times its EBIT. “If we assume for Oto Melara revenues equal to 400 million and an ebit of 44 million, the valuation of this asset falls in the 400-440 million range”, assessed Banca Akros. Instead, Rheinmetall’s multiples, about 0.7 times the ev / sales and about 7 times the ev / ebit, suggest an asset valuation of 280-308 million.
Banca Akros favors the multiple-based valuation of Bae Systems and reminds that Leonardo has committed to buy a 25.1% stake in the German Hensoldt (radar / defense electronics) by the end of the year, a deal worth approximately € 0.6 billion. The group is also willing to list its US subsidiary Drs on Wall Street to raise funds, but is also studying alternative options such as the sale of the automation business unit, a leader in automation for the logistics and airport sector.
“The sale of Oto Melara would represent a further option for Leonardo. It is not clear who the potential European buyer could be, but we would not be surprised if he were a German player in a sort of barter between Italy and Germany between defense electronics. , Hesoldt, and defense systems “, speculated Banca Akros according to which the news is potentially positive:” Oto Melara would bring out value, with Leonardo trading at around 4.6 times its 2021 ebit, it would improve the group’s focus: more electronics, fewer platforms and would remove the question mark on how it will finance the acquisition of Hensoldt “, concluded the investment bank that on the Leonardo stock, up by 0.55% at the time of € 6.594 on the stock exchange, maintains a buy rating and a target price of € 9.25.(All rights reserved)
