Paul Owsianowski of Active Ownership Capital presented his in-depth investment thesis on Agfa-Gevaert (Belgium: AGFB) at European Investing Summit 2019.

Thesis summary:

Agfa-Gevaert is a Belgium conglomerate that develops, produces and distributes analogue and digital imaging systems and IT solutions, mainly for the printing industry and the healthcare sector, as well as for specific industrial applications. In most of its markets the Company holds a #1-3 market position, globally. Its top-line has steadily declined as many of its end markets are facing headwinds from structural changes in the printing industry. The stock is out of favour with investors due to size, listing in Belgium, complexity of the Group, high pension obligations and lack of analyst coverage. Most investors remain unaware of the quality, profitability and growth outlook of its healthcare IT businesses – which entails Germany’s #1 HIS / hospital IT player – given the Company does not report this segment separately. We believe this is an attractive SOTP case as the value of the European part of its healthcare IT business alone surpasses the current market cap. In addition, there is potential to restructure the legacy business in a meaningful way which to date remains overly complex. Since AOC took its position in 2018 (c.14% ownership currently), the Company has announced the sale of parts of the IT business, three Board changes took place incl. appointing a new Chairman (AOC founding partner) and a larger working capital program (c.1/6 of market cap.) has been introduced.

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About the instructor:

Paul Owsianowski is an Investment Professional at Active Ownership Capital, where he has generalist coverage with a focus on tech, software, industrials, telco and healthcare.

Active Ownership Capital is an independent, partner-managed investment company which acquires significant minority stakes in publicly listed, undervalued small- and mid-size companies in the German speaking countries and the Nordics. Active Ownership Capital follows an active ownership approach and fosters value creation through operational, strategic and structural improvements.

Previously, Paul was an investor at a technology private / growth equity fund, where he focused on growth and buyout investments in technology and tech-enabled sectors. Paul also worked in M&A at Evercore Partners.