Emeco: Lowly Valued Australian Leader in Mining Equipment Rental

Peter Kennan of Black Crane Capital presented his in-depth investment thesis on Emeco (Australia: EHL) at Asian Investing Summit 2020.

Thesis summary:

Emeco is the largest mining equipment rental company in Australia, with dominant market share. The company provides fully maintained equipment and has in-house capability to overhaul and rebuild equipment, providing Emeco with a competitive advantage.

The shares recently traded at 2.8x EV/EBITDA and 2.5x free cash flow. At 2x net debt to EBITDA, leverage is relatively low and declining. Peter had originally presented Emeco in 2015.

For historical context, replay Peter’s presentation on Emeco from 2015.

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About the instructor:

Peter Kennan is CIO of Black Crane Capital. Prior to founding Black Crane in 2009, Peter was a leading corporate financier with UBS Asia Pacific. He has 25 years of investment and corporate finance experience across a diverse range of sectors and transactions. With UBS, Peter was Head of Asian Industrials Group for UBS Asia, a corporate finance sector team covering energy, infrastructure, resources, consumer/retail and general industrial companies. He achieved number 1 team rating in Asia in 2006 and 2007. Peter was also the Head of Telecoms and Media sector team for UBS Australia specializing in M&A, advising on many large, complex transactions. Prior to UBS, Peter spent 7 years with BP in a variety of engineering and commercial roles.