Q: Is the purchase announced positive for fru and a buy at current price?
5i Research Answer:
The bought deal is in conjunction with an acquisition, which looks good. The acquisition is immediately accretive. The balance sheet will have debt/cash flow at 1.1X, which is quite acceptable and below the company's target. Decent growth is expected next year. For investors comfortable with the cyclicality of the sector, we would be fine buying the deal for a high yield and potential growth in a sector recovery.