- Brera Holdings recently announced that it has signed an exclusive letter of intent to acquire an Italian second division soccer club in the Serie B pro league
- The company previously commissioned a valuation analysis that discusses Brera management’s intention to acquire professional soccer teams
- A conservative scenario contained in the analysis projects one-year 10x potential revenue growth, with accompanying implied share value increases, for Brea should it complete the potential acquisition
- A best-case scenario, in which Brera acquires a second soccer club, projects a jump in revenue of over 20x one-year post acquisition
- The report concludes by emphasizing that Brera’s future appears promising
Brera Holdings (NASDAQ: BREA) announced in September 2024 that it had signed an exclusive letter of intent to acquire another professional soccer team, this one in Serie B, the Italian second division. The company is now completing due diligence for the potential acquisition. A previously conducted investment valuation analysis (https://ibn.fm/QFukR) details the potential impact of this acquisition, and possibly others, on Brera’s revenue and valuation metrics.
The analysis, authored by S. Czerwenka, CFA, considers two potential acquisition scenarios, one conservative and the other a best case. The conservative scenario projects that should the company complete this potential acquisition or one like it, described as acquiring an Italian Serie B soccer club valued at around $22 million, the one-year post-acquisition accretive revenue to Brera would amount to about $11 million. This would elevate the company’s total annual revenue to about $12 million, representing an increase of 10x over current revenue.
In the report’s best-case scenario, wherein the company acquires two or more clubs with combined value of approximately $36 million, Brera would likely add another $13 million to its top line for a one-year post-acquisition total revenue of about $25 million, a potential 23x increase from the current level.
Considering comparable multi-club ownership (“MCO”) companies, the analysis identifies a revenue-to-enterprise-value multiple of five as best fitting Brera’s current portfolio of clubs and potential acquisition plans.
“Given the vast growth opportunities for MCO companies and the various revenue sources (from transfer fees to consulting work), a multiple of around five seems justifiable to derive a first valuation of BREA,” according to the analysis.
Applying this multiple in the conservative scenario revenue forecast, the report computes an implied stock valuation per share of:
- $3.60 in 2024
- $4.77 in 2025
- $6.49 in 2026
- $8.64 in 2027
Applying the same multiple to the best-case revenue forecast – but assuming an increase in shares outstanding to 16.2 million to account for the potential acquisition consideration — the report calculates an implied stock valuation per share of:
- $4.93 in 2024
- $6.84 in 2025
- $9.27 in 2026
- $12.33 in 2027
The valuation report concludes by emphasizing that, due to the company’s management and its strategy of identifying undervalued pro soccer clubs in first and second divisions globally, Brera’s future appears promising.
“Compared to top clubs, which can be overvalued and sometimes even part of bidding frenzies, true value is often found in the overlooked areas. And that’s exactly what Brera’s management is focusing on,” the report states.
Brera Holdings PLC is the only publicly traded company focused on multi-club ownership of international football (soccer) clubs. The company focuses on bottom-up value creation from undervalued clubs and talent, innovation-powered business growth and socially impactful outcomes.
Brera intends to expand its social impact soccer business by developing a global portfolio of emerging football and other sports clubs, providing the company with increased opportunities to earn tournament prizes, gain sponsorships and provide other professional football and sports-related consulting services. Brera currently owns or operates four football clubs in Africa, Asia and Europe, as well as a women’s professional volleyball club that competes in the Italian first division, among the top in the world.
For more information, visit the company’s website at www.BreraHoldings.com.
To read the investment valuation analysis conducted, visit the 24/7 Market News report at https://247marketnews.com/brea-holdings-plc-cfa-analyst-report/.
NOTE TO INVESTORS: The latest news and updates relating to BREA are available in the company’s newsroom at https://ibn.fm/BREA
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