KEDM Lite Vol. 3

This week’s additions and highlights

1. SPIN-OFFS

• Ramsay Health Care (RHC AU). Ramsay is planning to spin‑off its struggling European arm, Santé, expected Q4 26. This immediately revived the takeover angle here. By carving out the lowest‑margin, most complex part of the group, Ramsay removes the very obstacle that derailed KKR’s 2022 bid. The CEO wouldn’t comment on M&A, but the move seems as a clear simplification that makes the Australian hospitals business cleaner, higher‑visibility, and easier to value.
• Medtronic (MDT US). Medtronic continues to prepare for the spin of MiniMed, its Diabetes unit. The spin remains on track for Q4, ticker MMED. This will be an interesting spin, as the unit is ~10% of total revenues, but is one of the key growth drivers of the group.
• Carlsberg (CARLB DC). Generally too large for our taste, but interesting nonetheless. Carlsberg is preparing a potential $700m IPO of its India business. A listing would follow other multinationals tapping India’s higher valuations. Carlsberg India is the country’s #2 brewer with ~22% market share and about ₹90bn ($1.1bn) revenue in FY25.

2. STRATEGIC ALTERNATIVES & REVIEWS

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

• Johnson Matthey (JMAT LN). Honeywell forced a price cut to keep its deal for Johnson Matthey’s Catalyst Technologies alive. After months of delays, they lowered the price from £1.8bn to £1.325bn (and was close to walking away altogether). The market doesn’t like it, with JMAT shares down 17%, but management is sticking with the sale, arguing it still makes sense strategically. That said, the interesting part here is that the deal is done, and we can focus on capital returns, with around £1bn indicated to be handed back via a special dividend and buybacks once the deal closes. Quite a bit on a £3.2bn market cap.
• Domo (DOMO US). Domo will be exploring strategic alternatives. The market has not been kind to this company as growth strongly decelerated in 2023-2024. With that, the focus shifted towards profitability, where there’s plenty of opportunity still with roughly 75% gross margins. Domo will finally achieved positive EBITDA this year. To note that, despite the typical disgusting software SBC, management regularly purchased shares on the open market. Undoubtedly the share price has been hammered by the pressures from AI as well. We generally like to see the price stabilise, which it doesn’t seem to be anywhere close to, but already ~10x EV/EBITDA for what could be 20-30% EBITDA growth p.a. over the medium-term.