MTQ

MTQ: OSKDMG maintains Buy and raises TP to $2.67. Note that MTQ will be acquiring 100% of Binder Group Pty Ltd, a private Australian company providing pipe support and pipe suspension solutions to the oil & gas sector, for AU$19.3m cash. Housee estimate the forward purchase P/E at around 4x. Following the purchase, raise FY14F/15F estimates by 3/10%, with TP accordingly rising to $2.67, based on a 10x blended FY14/15F P/E. Binder is a private Australian company specializing in custom-built pipe support and pipe suspension solutions utilized in LNG pipeline related works. It has a 50% stake in an Indonesian manufacturing facility. Its book value is AU$6.2m while FYE Jun13 profits stood at AU$1.9m. The group already recorded AUD1.8m of profits in the four months ended Oct 2013. The acquisition will allow MTQ to expand its oilfield engineering business to a larger customer base, while the 50% Indonesian stake will give it a foothold in the growing Indonesian market. We also see shareholder value creation via this attractively-priced purchase, with a direct boost to EPS growth in the near term.