Plant Power? Addressing Top 3 Investor Pushbacks on WhiteWave Deal; OW
Shares price reaction today (2%) does not fully price in an enhanced growth/mix profile + solid financials from a WWAV acquisition (~8- 15% Y1-3 accretion, ROIC>WACC (~6.5%) by Y6/7), in our view. We think this reflects market scepticism on several fronts, which, while understandable, we see as overdone.
In this note, we address 3 key concerns that have come up in our conversations with investors today on the proposed Danone/WhiteWave (WWAV) deal. We also publish details of our pro forma model estimates for the combined company.