Last week Mirion Technologies announced its proposed business combination with GS Acquisition Holdings Corp II (NYSE:GSAH). Mirion Technologies is a market leader in vital radiation detection and measurement with operations across 13 countries. The transaction has an enterprise value of $2.6 billion, which has caught the interest of investors on Wallstreet. The combined company will trade on the New York Stock Exchange under the ticker symbol (NYSE: MIR). With the transaction expected to close in the latter half of 2021, this article will breakdown everything investors need to know about the merger.
Table of contents
Key details of the GSAH merger
- The merger is set to take place either in the third or fourth quarter of 2021. The combined company will need to obtain regulatory and shareholder approval prior to closing the transaction.
- The majority of the cash proceeds from the merger will be used to offer a cash consideration to Mirion’s existing shareholders alongside paying down the companies debt.
- Public equity holders of GSAH II will own 37% of the combined business at closing.
- Unlike other popular SPAC candidates that are currently not generating revenue, Mirion generated $650.50 Million in adjusted revenues for 2020.
“Mirion is exactly the kind of company we hoped to find when we launched GSAH II a year ago. It is a high quality, defensive business with a long and profitable operating history, strong and resilient cash flows, with significant opportunities ahead for continued growth and margin expansion.” said Tom Knott, CEO of GS Acquisition Holdings Corp II.
Mirion Technologies financial breakdown
Firstly, Mirion Technologies has delivered steady revenue growth over the past three years of operations. The company is placed in the defensive category, meaning its diversified revenue mix is resilient in economic downturns according to the company. Furthermore, over 70% of Mirion’s revenue is generated from replacement, maintenance or recurring service. Another interesting insight into the company is its top 5 customers only represent 21% of their total sales.
Healthcare remains the companies largest revenue driver (44% of total sales), with Nuclear not far off (39% of total sales) and diversified industrial representing 17% of total sales. In addition, the market of each of these segments is forecasted to grow between 4-6% annually.
Looking forward, the company expects to generate $688.7 Million in revenue for 2021. By 2023 the company is forecasting revenues to jump to $761.9 Million with an Adj. EBITDA of $205.1 Million. However, it is important to note these are only forecasts at this stage. See reference for the above data on Mirion Technologies Investor presentation June 2021 here.
Summarising the GSAH merger
In summary, the proposed merger if approved will see Mirion Technologies trading on the NYSE by the end of 2021. After diving deeper into the financial outlook of the combined business, we can see why investors are beginning to take interest in GSAH stock. However, SPAC companies tend to carry additional volatility pre-merger as we have seen with SoFi and Clover Health.
Written by Tyger Fitzpatrick, Founder of Youth Investment Group.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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