KEDM Lite Vol. 13

This week’s additions and highlights

1. SPIN-OFFS

• Essity (ESSITYB SS). Essity is considering a separation / spin of its Consumer Tissue unit. Is it finally going to happen? The Tissue business is rough, there’s not much growth and operating margins are much below the group average. A separation has long been discussed and makes sense ioo. This might finally lead to some upside to Essity as this drag is removed. Also to note are the non-negligible insider purchases.
• Flex (FLEX US). Flex recently jumped on a strong 2027 outlook but also plans to spin off its cloud and power infrastructure business, the latter separating its rapidly growing AI-focused business from the core manufacturing business. Let’s wait for more details, but you know we like to keep a close eye on potential hype stocks. Also, a reminder that the previous spin Nextpower (NXT US) is up almost 200% in roughly a year. Will we get a repeat?
• Enviri (NVRI US). Enviri announced that it will evaluate ‘value creation alternatives’ including a sale or separation of the Clean Earth business as it seeks ‘to close the persistent gap between Enviri’s public market valuation and the company’s sum-of-the-parts value’. Little growth, quite some debt and large divestment (if not full sale) could make this one quite interesting.UPDATE (May 12, 2026) Enviri approved the $3bn sale of its Clean Earth business to Veolia. Not bad for a $3.2bn EV company. This brings it much closer to spinning off its Environmental and Rail businesses (to be called New Enviri) before closing the sale, with a target of mid‑2026. As previously flagged, New Enviri is expected to generate about $1.2bn revenue and $140m EBITDA with 2x net leverage. There’s room for earnings and cash‑flow improvement as end markets recover and legacy project contracts roll off. This remains an interesting case with solid upside and a very decently protected downside.
• Tovis (051360 KS). Tovis is spinning off its fast‑growing automotive display unit, Neoview, on July 1. RemainCo is a steady, high‑return industrial monitor business while Neoview is smaller but growing quickly. Back of the envelope, we’re looking at two business trading at lsd-msd PEs with good growth and very decent returns. Governance looks good, and the company has been buying back shares over the past few years.
• Datavault AI (DVLT US). Datavault AI is exploring a spin of its Acoustic Sciences division into a separate NASDAQ‑listed company called API Media. The move will let Datavault focus on its core data‑monetization platform while giving the acoustic unit its own valuation, backed by patents, WiSA/ADIO technology, and some recent (potentially interesting) wins. Target is completion by year‑end 2026. No idea here and it all looks strange, but you know that we appreciate strange.

2. STRATEGIC ALTERNATIVES & REVIEWS

(Potential take-outs, asset sales, M&A, etc.)

• Intertek (ITRK LN). We said to expect more action over at testing company Intertek (ITRK LN), which rejected an initial £7.9bn cash offer from EQT (£51.50 p/s), and now a more recent one at £58 p/s. EQT now has until May 14 to ‘put up or shut up’. Meanwhile, Intertek seems to prefer a sale of its Energy & Infrastructure division, for which it said it received interest, and that this move will reward shareholders. A reminder that Nelson Peltz’s son Matt has been building a stake in Intertek and has been pushing management to separate the energy and infrastructure unit. Whatever happens, the current share price just feels too low for all this action…