I want to tell you a story: I've called it The Tale of Two Equities.
The first is, of course, Ocado, which floated this week following months of extensive media scepticism, culminating in reports of a "humiliating climbdown" and a "bargain basement" price of £1.80.
As I said in our daily blog on Thursday, raising £200m is not humiliating or a climbdown. Under the circumstances (macro and micro), it's a triumph.
A 33% discount on a valuation based on 40 times EBITDA reminds me of the promotions you find on Ocado's Waitrose Essential strawberries: reduced from £3.99 to £1.99 while Asda is flogging theirs for £1.
The successful flotation secures the future of the business and will please bricks and mortar grocery retailers, too, as such a valuation can only put their own meagre multiples right now in a better light.
The second equity is Birds Eye Iglo, of which I can find barely any mention in the mainstream business media this week. Yet it raised 500m (£421m) - more than double the Ocado figure, in a quarter of the time - to secure the acquisition of Unilever's Findus frozen food business in Italy.
The lack of publicity is not altogether surprising: Birds Eye's route to expansion is via private equity, while Ocado's flotation makes it, by definition, public; the acquisition involves fish fingers and frozen peas, which are a lot less glamorous than Ocado's gigantic gadget-play, all bells and whistles; and public relations was barely even an afterthought: we received not one press release throughout the process.
The lack of publicity hasn't stopped us from leading with the story this week, however. As rivals such as Northern struggle, here is a well-managed British company, now operating in 15 countries, that is growing fast, generating cash, and supported by a private equity backer in its long-term expansion. Sounds like a good story to me.
Anyway, congratulations to both.
The first is, of course, Ocado, which floated this week following months of extensive media scepticism, culminating in reports of a "humiliating climbdown" and a "bargain basement" price of £1.80.
As I said in our daily blog on Thursday, raising £200m is not humiliating or a climbdown. Under the circumstances (macro and micro), it's a triumph.
A 33% discount on a valuation based on 40 times EBITDA reminds me of the promotions you find on Ocado's Waitrose Essential strawberries: reduced from £3.99 to £1.99 while Asda is flogging theirs for £1.
The successful flotation secures the future of the business and will please bricks and mortar grocery retailers, too, as such a valuation can only put their own meagre multiples right now in a better light.
The second equity is Birds Eye Iglo, of which I can find barely any mention in the mainstream business media this week. Yet it raised 500m (£421m) - more than double the Ocado figure, in a quarter of the time - to secure the acquisition of Unilever's Findus frozen food business in Italy.
The lack of publicity is not altogether surprising: Birds Eye's route to expansion is via private equity, while Ocado's flotation makes it, by definition, public; the acquisition involves fish fingers and frozen peas, which are a lot less glamorous than Ocado's gigantic gadget-play, all bells and whistles; and public relations was barely even an afterthought: we received not one press release throughout the process.
The lack of publicity hasn't stopped us from leading with the story this week, however. As rivals such as Northern struggle, here is a well-managed British company, now operating in 15 countries, that is growing fast, generating cash, and supported by a private equity backer in its long-term expansion. Sounds like a good story to me.
Anyway, congratulations to both.
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