This is a not-so-usual tale of a foreign company buying a U.S. entity to spread its wings in America. Phoenix-Shannon (PHNXY), an Irish company whose shares trade on the NASDAQ, will hike its sales nearly fivefold--and just about double earnings--when it gobbles up the assets of Ney Dental International, a unit of Andersen Group (ANDR). Phoenix and Andersen expect to announce the deal before long.
Phoenix, a manufacturer of alloys and other products used to fabricate crowns, bridges, and other dental work, should attract a larger institutional following in the U.S., says Phoenix President and CEO Ola Johansson. Phoenix markets its products solely in Europe. Its purchase of Ney, which had $22 million in U.S. sales last year, gives Phoenix a big foothold in America, he adds. In 1995, revenues from Ney totaled $38 million and from Phoenix $11.5 million.
Now at 11 3/4, with a price-earnings ratio of 15 based on estimated (pre-acquisition) net of 75 cents a share, Phoenix should trade at a higher multiple, says one analyst. The Ney purchase for $17.9 million will boost Phoenix' earnings to at least $1 a share, he says. Ney holds 16 patents for products, serving 3,500 customers worldwide.