NCC Group Completes Disposal of Fox Crypto Business
Why we think this is good
The RNS announcement details the completion of the disposal of the Fox Crypto business for £65m, which represents a 16.5x 2024 EBITDA multiple. This disposal is part of the Group's transformation strategy to simplify the business and focus on the Cyber Security division. The proceeds will be used to repay debt and reduce the Group's net debt, which is a positive development. However, as this is an asset disposal rather than a profit upgrade or trading ahead statement, the 'Very Good' rating constraint applies, limiting the sentiment score to 'Good'.
Key Points
- Completed disposal of Fox Crypto B.V. in the Netherlands for £65m
- Disposal is part of the Group's transformation strategy to simplify the business and focus on Cyber Security
- Gross proceeds will be used to repay RCF borrowings, reduce net debt, and facilitate growth in Cyber Security
- Group net debt expected to be in the range of £0-£3m following the disposal
Summary
NCC Group plc has completed the disposal of its Fox Crypto B.V. business, part of its European Cyber division in the Netherlands, for total consideration of £65m. The disposal is in line with the Group's transformation strategy to simplify the business and create a more focused Cyber Security division. The gross proceeds will be used to repay the Group's RCF borrowings, reduce net debt, and facilitate growth in the Cyber Security business. Following the disposal, the Group's net debt is expected to be in the range of £0-£3m.Broker Targets:
- Shore Capital reiterated a 'Buy' recommendation on 10-Dec-24 with a price of 137.60p.
- Shore Capital reiterated a 'Buy' recommendation on 01-Aug-24 with a price of 145.00p.
- Shore Capital reiterated a 'Hold' recommendation on 09-Apr-24 with a price of 122.20p.