Stockwik - A blueprint for success

Small serial acquirer with ample acquisition headroom ’20-’23e EBITDA CAGR of 37. 5% Fair valuation range of SEK 143-264 per share Resilient business group and a sound acquisition approach Stockwik Förvaltning is a Swedish-based, acquisition-driven company that has grown its sales by 33% p. a. since 2014.

The decentralized group contains 16 companies with exposure to resilient end-markets such as retreaded tyres for heavy vehicles, healthcare services, property services including installation and landscaping, and IT services for the public sector, among others. Stockwik has made 16 acquisitions since its inception, in 2013, of which 11 have been since 2019. Stockwik only acquires companies with a long history of resilient profitability and growth.

When looking at the 16 companies on an aggregated level, they grew their sales at an average of 11% p. a. between 2006 and 2020, confirming it has remained true to its acquisition strategy.

Looking ahead, we expect the company to continue delivering stable organic growth and using the cash flow generated and solid cash position to add companies to the group. ’20-‘23e EBITDA CAGR of 37. 5% In ’16-’20, Stockwik grew its EBITDA at a CAGR of 113%, predominantly through margin-accretive acquisitions.

In the same period, the margin expanded from 2. 2% to 8. 4%.

Looking ahead, with Stockwik’s Q2’21e cash position of ~SEK 242m and average NCF of SEK 82m in ‘21e-‘23e, we believe it has plenty of headroom to continue with a high pace of acquisitions. We forecast the company to grow at an EBITDA CAGR of 37. 5% in ’20-‘23e, supported by recent acquisitions and resilient end-markets.

However, we do not include any additional acquisitions in our estimates. Fair value range of SEK 143-264 per share We have used four valuation methods and have weighted them accordingly to derive a fair valuation range for Stockwik. Based on our findings, we arrive at a fair valuation range of SEK 143-264 per share.

This value is most sensitive.