BHG: Acquires AH-trading at attractive multiples - ABG

A leading German outdoor & garden furniture player
Adds ~6% to EBITDA
Price tag implies EV/EBITDA of 9x (‘21e)

On Thursday after market close, BHG Group announced the acquisition of 80% in AH-trading (AH), a leading German outdoor and garden furniture player. We welcome an acquisition outside the Nordics and appreciate the product portfolio of AH, which sells a combination of private label (42% of ’20 sales) and external brands (58% of ’20 sales), in line with BHG’s strategy. The company was founded in 2004 and the founders will remain active in the company as CEO and COO, holding a minority stake of 20% (BHG holds a call option to acquire the minority based on 2024 performance).

Primarily due to a generally soft sentiment within the Nordic e-commerce space, the BHG shares have plummeted close to 20% YTD and 12% over the last three months. With the AH deal adding ~5% to EPS, we believe that the stock is likely to come up by at least as much. Given the strong, non-Nordic profile of AH-trading, our best guess is that the stock could come up by 6-8% in Friday trading.

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