8 June 2017 – disposal
Molins has announced that it has entered into a conditional agreement with G.D S.p.A., a wholly owned subsidiary of Coesia S.p.A., to sell its Instrumentation & Tobacco Machinery division for a gross cash consideration of £30m on a cash free debt free basis. Net proceeds of the sale will primarily be used to invest in the company’s packaging machinery activities. This is clearly a significant deal given that the company has a market capitalisation of less than the cash consideration. Even after taking into consideration a one-off contribution to the Molins UK Pension Fund of approximately £2.7m and that £1.5m will be retained within an escrow account for up to two years in accordance with warranties and indemnities, Molins will receive a balance of net proceeds of £23.1m. The shares continue to look undervalued and we rate them as a BUY.