GVS (AO) | Buy | Tender offer execution soon, plan update in Autumn

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GVS (AO) | Buy | Tender offer execution soon, plan update in Autumn

GVS Buy | Target Price: EUR4.70

Company description Management

Founded in 1979 and listed in 2020, GVS provides filtration solutions for critical Massimo Scagliarini, CEO

applications in highly regulated end-markets. Strict regulation acts as an Marco Pacini, CFO

effective entry barrier. The company is vertically integrated into the production Matteo Viola, COO

of membrane. It boasts a global reach and has made almost 20 acquisitions since Key shareholders

2009, with the purpose of entering or strengthening its position in different Free float 37.11%

geographies and applications. GVS Group 60.00%

Investment case Valuation methodology

GVS is a provider of filtration solutions for different applications We value the stock at EUR4.8 through our DCF (WACC: 9%, TG

spanning healthcare & life sciences, health & safety, and energy rate: 3%, terminal adjusted EBIT margin: 20%).

& mobility. The company is vertically integrated with internal Our peer-based valuation after a 20% discount vs peers (mostly

production of membranes. It has a global reach. US-based) points to EUR4.6

2020 (IPO) was exceptionally good thanks to growth in safety Risks to our rating

masks. 2021 marked a slowdown. 2022 saw negative organic Worse-than-expected organic growth, lower-than-expected

growth and margin erosion, and large M&A burdened the margin trajectory.

balance sheet. Starting from 2023, the company is rebuilding Ineffective product innovation. Increase in the churn rate

margins and deleveraging. However, organic growth remains compared to currently low levels.

sluggish, including 2026E. The Haemonetics whole blood Overly expensive, strategically wrong, or badly executed and

integration is progressing slowly. integrated M&A.