Bunzl share price: Company expands Brazilian presence with acquisition

on Mar 17, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Monday, March 17: Shares in Bunzl (LON:BNZL) have been trading higher today, after the UK-based distribution and outsourcing group announced that it had expanded its footprint in the Brazilian healthcare market with an acquisition of a local medical consumables supplier.

The FTSE 100-quoted company said in a statement to the London Stock Exchange this morning that it had bought Lamedid Comercial e Servicos. The São Paulo-based firm supplies its own-label medical and healthcare consumable products to hospitals, clinics and laboratories as well as to distributors throughout Brazil. Its revenue in 2013 totalled around £12 million, Bunzl noted.

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Commenting on the acquisition, CEO Michael Roney said: “The purchase of Lamedid has significantly increased the size of our healthcare business in Brazil, having entered the healthcare sector there with the acquisition of Labor Import last year. The two businesses complement each other and together will enable us to extend our product offering in this important market.”

**Bunzl share price on the up**
Boosted by the group’s expansion announcement, Bunzl’s share price rose this morning. The stock traded 0.70 percent higher at 1,576.00p as of 10:02 UTC.

The share price has been rallying since the company released its full-year results on February 24 (Bunzl share price rallies on robust results). For the year ended December 31, the company’s pre-tax profit grew 10 percent to £289.9 million from last year’s £263.8 million, while revenues increased 14 percent to £6.10 billion.

Looking ahead, Roney gave a positive outlook for 2014, citing an improving macroeconomic backdrop and the success of the group’s acquisition-driven strategy.
Since the release of Bunzl’s annual results, the stock price has risen over six percent, taking the firm’s year-to-date increase to almost nine percent. Research analyst reports have also underpinned the positive sentiment over the distribution and outsourcing firm.

Credit Suisse upgraded Bunzl’s shares to a ‘neutral’ rating in a report issued on Wednesday, February 26. They also increased their price objective on the stock from 1,000p to 1,530p. A day earlier, Cantor Fitzgerald Europe, whose analysts rate Bunzl as a ‘sell’, raised their price target on the shares from 1,260p to 1,350p.
According to AnalystRatingsNetwork data, four research analysts have a ‘sell’ rating on the distribution and outsourcing specialist, 11 have it as a ‘hold’, and six are calling it a ‘buy’. The stock’s consensus rating is ‘hold’ with an average price target of 1,371.48p
**As of 10:16 UTC, buy Bunzl shares at 1,579.00p.**
**As of 10:16 UTC, sell Bunzl shares at 1,577.00p.**


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