Bell Potter has a “buy” recommendation on RCG Corporation and a $1.20 target price.
The broker notes that RCB will acquire Accent Group (AGL), which has exclusive distribution licences for popular Skechers and Vans sneakers, for $180 million to $200 million “at an attractive 6x EBITDA, more than doubling its size”.
“The acquisition of AGL delivers a number of highly strategic benefits” including “new growth engine with significant growth now both at the retail and wholesale level”, “portfolio diversification”, “cross-branded distribution opportunities”, “scope to accelerate vertical strategy” and “scale benefits on costs, growth prospects and competitive position”.