Analyzing an Acquisition Target: Kingfisher plc (KGF)

Page 1 of 2

Acquisitions are one of the most exciting things that can happen to your stock portfolio. Often these events result in the acquired company seeing a double digit percentage gain overnight. While investors would be wise to avoid investments purely because they are the speculation of takeover chatter, there is nothing wrong with investing in good, well-run companies that have the added kicker of being the potential target of a larger peer or a private equity firm. For that reason, I would like to discuss the takeover prospects of UK company Kingfisher plc (LON:KGF), Europe’s largest home improvement retailer, and the world’s third largest.

The King of Europe

While readers are likely very aware of The Home Depot, Inc. (NYSE:HD) and Lowe’s Companies, Inc. (NYSE:LOW), the world’s No. 1 and No. 2 home improvement retailers, respectively, Eurasian heavyweight Kingfisher probably is not a household name in your neck of the woods. As mentioned above, UK-based Kingfisher is Europe’s largest home improvement retailer. It operates its home improvement business under the B&Q, Castorama, Brico Dépôt, Screwfix, Koçtaş stores, as well as selling its own branded products inside of their stores. In the eight total Eurasian countries in which it operates, (the UK, Ireland, France, Spain, Poland, Turkey, Russia and China), Kingfisher has a total of 1,002 stores.

The Home Depot, Inc. (NYSE:HD)Business Improvements
Although Europe had (and still has) a severe housing crisis of its own, Kingfisher’s new management set forth a plan in 2008 to deliver greater shareholder value. The plan included many of the same initiatives implemented by America’s home improvement giants: improving the customer service experience, creating more of an online shopping presence, streamlining the business to increase profit margins, and expanding their operations to new markets.

The results of that plan can be seen in the company’s share price. Despite European uncertainty engulfing the whole continent, Kingfisher’s shares today have recovered completely from their 2008 lows.

International & Emerging Market Appeal

Even though Home Depot and Lowe’s operate internationally, Kingfisher is truly an international company. 64% of Kingfisher’s stores are located outside the United Kingdom, with 16.5% located in the emerging markets of Eastern Europe, Russia, and China.

And these numbers do not include Kingfisher’s equity interest in the German home improvement retailer Hornbach, with has 135 stores of its own located in the additional nine countries of Germany, Austria, the Czech Republic, Luxembourg, the Netherlands, Romania, Slovakia, Sweden and Switzerland. Including Hornbach’s stores, Kingfisher’s total store count becomes 1,137 in 17 total countries, with 81% located outside the UK and 15.75% located outside of Western Europe.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!