Three things you need to know in the financial markets today from investment writer, Tony Cross.
#1. BAE Systems $5bn acquisition
BAE Systems [LON:BAE] has this morning announced that it will acquire Ball Aerospace in an all-cash transaction valued at $5.55bn. That’s a 13x multiple on earnings and the company believes it has the potential to increase revenue by 10% pa over the next 5 years, with margin improvements and strong cash conversion also in play. This is a significant acquisition – the market will no doubt react at the open as to whether this truly represents value for shareholders.
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#2. ITM Power full year results show moves in right direction
Full year numbers are out from ITM Power LON:ITM this morning. Revenues of £5.2m have been reported, down from the £5.6m posted a year ago but well up on the £2m forecast. EBITDA losses have however come in at the top end of guidance. Looking ahead, FY24 revenues are expected to be in the £10-£18m range and the company should remain well funded with around £200m cash in hand. The turn around plan appears to be advancing well and the CEO note that more product has left the ITM factory over the last six months than was seen in the previous 22 years.
#3. Atlantic Lithium funding and offtake agreement with partner
Atlantic Lithium LON:ALL has announced that partner Piedmont Lithium has exercised an option to acquire a 22.5% interest in the company’s Ghana portfolio, whilst also funding the first $70m of development costs. This provides valuable de-risking for Atlantic’s shareholders, granting Piedmont one board seat and 50% of the offtake for the life of the project, whilst having met around 70% of the development cost.
