Topic: Nynomic announced the acquisition of a 31.25% stake in NLIR. While still being comparably small, its unique technological focus should further strengthen Nynomic’s problem solving abilities and hence yield significant cross-selling opportunities going forward.

In detail, Nynomic acquired 31.25% of Danish NLIR ApS, a spin-off company from the Photonics Engineering Department of the Technical University of Denmark, which is set to become the eleventh pillar of the group despite the current minority shareholding. Based on the achievement of certain milestones, Nynomic has already secured options to expand its stake going forward. While the valuation has not been disclosed, we estimate it to be in the low single-digit €m range (eNuW: € 1.5m), largely in line with the expected sales volume of € 1-1.5m (eNuW) this year.

Strategically highly sensible transaction. NLIR's patented measurement technology enables, for the first time ever, the use of mid-infrared (MIR) sensors on an industrial scale (high analysis speed despite low system costs compared to competitive products), which is seen to be complementary to Nynomic's successful near-infrared sensors. Some application areas include optical coating testing of semiconductor wafers during production and a more precise detection of waste plastics in recycling.

While NLIR offers only a limited financial impact in the short-term, cross selling opportunities across Nynomic’s customer base should allow for strong sales growth during mid- to long-term (eNuW > € 10m sales with EBIT margins on group level). 

Additional positive newsflow ahead. During H2, Nynomic is seen to report further sequential operational improvements following a weak Q1 (project postponements and delayed call-offs). In detail, we expect € 73.5m sales (+17% yoy) and € 13m EBIT (+52% yoy). Further, we expect the company to announce at least one additional (potentially larger) acquisition during the next 6-12 months.

Nynomic looks poised for attractive sales and margin growth during the mid-term as reflected by the recently raised mid-term guidance (€ 200m sales and a 16-19% EBIT margin during the next 3-5 years). Yet, this does not seem adequately reflected by the current valuation of 8.1x EV/EBIT 2024e. We hence reiterate our BUY rating with a € 57 PT based on DCF.