The merger is definitely a case of when and not if. There don’t seem to be any reasons for it to not go through, at least not that we are aware of. I would like to believe that the management would have let us know had there been issues – they have been quite transparent on most matters so far, including their handing of cash.
That apart, on pure fundamentals, Kilpest is trading at an EV of well under 5 times non-covid sales. This for a business with gross margins over 70%, fast growth and cash rich looks like a lot of margin of safety. I would like more information on the cash conversion though – receivables continue to be quite high and impact the ROCE. I wish they did concalls!!
Disclosure: Invested with about 6% of my PF. Added some after the result as execution seems on track.
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