Having had some time to look into Tershine myself this morning, it certainly seems like a good acquisition. Of course, since the purchase price is unknown, it’s hard to state that definitively, but one should probably trust that Relais has followed roughly the same approach as in their previous acquisitions. It’s kind of nice that the Tershine entrepreneur is receiving new Relais shares, so they are in the same boat, though personally, I feel the stock is currently undervalued, making it less than ideal to use as a transaction currency.
I have looked on with a bit of envy at Aurora’s journey on the stock exchange so far; the share has yielded over 50% since its IPO, while Relais has pretty much been treading water. Yet, at the time of their respective listings, they were valued quite neutrally in relation to each other. Of course, in such a short timeframe, momentum plays a very important role in development, so one can also just ignore a comparison over such a short period.
Back to Tershine. I will try not to repeat too much of what has already been mentioned in the press releases. Currently, the majority of the revenue comes from Sweden, but these products are also sold in Finland and Norway. I couldn’t find a percentage breakdown, but I imagine the lion’s share comes from Sweden. Customer satisfaction for these products seems to be very high, which should provide a good foundation for an internationalization leap. It’s a bit risky to interpret the EBIT% trend, as their investments in a given year, for instance, might hit it hard, but I’m thinking of 20% as an average, which I would be satisfied with. I also feel that cleaning agents are a product category where, with the right networks, internationalization could be done relatively easily. Adding such a product to one’s own assortment is certainly not a huge risk, given that the cost of an individual product is modest. Of course, it must also be said that the competition in these cleaning agents is certainly tough. Fortunately, the Swedes have always been good at branding, so that should be a big help here. 