Altitude Group (ALT) : Corp

Major strategic alliance

Key data

  • Share price (p) 48.0
  • Target price (p) 120.0
  • Market cap (£m) 33.0
  • Enterprise value (£m) 29.5

Altitude has announced a new strategic alliance with the Advertising Speciality Institute (ASI), the largest media, marketing and education organisation, to integrate its proprietary ESP platform, North America’s largest promotional product and supplier database, into both the AIM Smarter portal and AIM Tech Suite. As a result of the integration, AIM members will gain access to an additional c.3,000 suppliers, alongside AIM’s preferred suppliers and nearly 1,000,000 products, all of which can be sourced and purchased via the AIM Tech Suite. With these additional suppliers, Altitude will also gain greater geographic reach and a broader product base, two core objectives of the business. Additionally, the major alliance will provide greater validity for AIM as a major player within the US promotional products industry, given ASI’s network of 23,500 suppliers, distributors and decorators. Already fully integrated into the AIM platforms, AIM members can immediately realise the benefits of ESP, including greater efficiency and an expanded search via AIM’s search engine, with real-time supplier product and pricing data powered by ESP. ESP is to be bundled into several of the AIM membership programs, and as such we expect increased engagement, among both new and existing members, for the enhanced membership packages. We maintain TP 120p and forecasts.

Andrew Darley 020 7220 0547 adarley@finncap.com

Tremor (TRMR) : Corp

News Corp strategic partnership and Unruly acquisition

Key data

  • Share price (p) 170.0
  • Target price (p) 500.0
  • Market cap (£m) 224.4
  • Enterprise value (£m) 166.9

Tremor has announced that it is acquiring Unruly from News Corp through the issuance of 8.5m new Tremor ordinary shares to News Corp (6.9% of Tremor’s prior shares or £14.5m), and Tremor has entered into a global partnership with News Corp for 3 years of exclusive access to outstream digital video adverts for over 50 News Corp publications, with Tremor committing to £30m of ad spend over 3 years. This indicates News Corp has considerable confidence in Tremor, and as News Corp now has a substantial interest in the Tremor investment case, it is anticipated that Rebekah Brooks (CEO of News UK) will join Tremor’s board. Tremor has also issued a short trading update, with FY19 EBITDA in line with market expectations (H2 c$39m), net cash in line except for a $5m advance, and FY19 revenue lower than expected due to Tremor focusing on its profitable, core activities and removing intercompany revenue. We consequently adjust our forecasts with a breakdown in our full note, published separately. Tremor subsequently trades at a substantial discount to its peers on 12M fwd multiples of 2.4x EV/EBITDA and 5x adj P/E, and we look forward to Tremor issuing a more detailed trading update in late January.

Michael Hill 020 7220 0554 mhill@finncap.com

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