Nidda Healthcare – Exit - Positioning.
All,
Please find our unchanged analysis here.
As Nidda/Stada has completed its amend and extend exercise, we are rotating our capital into a more attractive opportunity. The 2025 bonds we hold are now trading inside 6% and are fully priced. Nidda's recent TL G was priced at 9%, so the cost of capital has not yet fallen to easily manageable levels. We will continue to cover Nidda as we see further opportunities possibly emerging in time. Markets continue to be roiled by the Ukraine war, and no end is in sight.
Investment Rationale.
- We are selling our 5% NAV position in the Nidda 5% 9/2025 bonds at 98.75c/€
- We have achieved a return of 13% on our investment over the last year and the bonds are now trading close to par, yielding inside 6%. It is time to deploy our capital elsewhere.
- Bain/Cinven will want to return to using Nidda as a vehicle for acquisitions and will want to consider an IPO when market conditions are better.
- Even if the above actions get pushed out by continued violence in Ukraine, the business generates significant cash, and leverage will fall.
- A significant debt-financed acquisition could provoke our interest again, and we will keep an eye on developments.
I look forward to discussing this with you all.
Regards
Aengus
T: +44 203 744 7055