Insights

Why the Codan (ASX:CDA) share price will be on focus today

The Codan Limited (ASX: CDA) share price will be on focus this morning following the company’s acquisition announcement. Here’s the details.
The post Why the Codan (ASX:CDA) share price will be on focus today appeared first on The Motley Fool Australia. –

Man with binoculars standing on edge of building looking into distance

The Codan Limited (ASX: CDA) share price will be on focus this morning following the company’s acquisition announcement. At yesterday’s market wrap, the technology company’s shares finished the day at $15.44.

Can the Codan share price go higher?

It will be interesting to see if investors drive the company’s shares higher following its latest announcement to the ASX.

According to this morning’s release, Codan advised it has entered into an agreement to acquire Zetron, Inc. (Zetron) from JVCKenwood Corporation.

Founded in 1980, Zetron is an American company that manufactures mission-critical communication technologies. Products include voice dispatch, emergency call-taking including next-generation 911 (NG911), mapping, computer-aided dispatch, and fire station alerting. The business operates in an array of industries such as public safety, transportation, utilities, natural resources, healthcare, and academic institutions. Zetron has offices in the United States, Australia, and the United Kingdom.

The acquisition will see Codan make an upfront cash payment of US$45 million for 100% of Zetron’s issued share capital. Codan will use existing cash reserves as well as tap into its recently approved debt facility to fund the takeover.

It’s expected that the sale will be completed before the end of this month, subject to usual customary conditions.

Once under Codan ownership, Zetron is anticipated to contribute roughly $67 million in sales for the next financial year. In addition, earnings before interest, tax, depreciation and amortisation (EBITDA) is forecasted to be at $8 million for FY22. This in turn will make Zetron an earnings-per-share accretive business.

Management commentary

Codan managing director and CEO Donald McGurk commented:

The acquisition of Zetron is in line with Codan’s well-publicised strategy to transform our Communications businesses from products to solutions. This acquisition allows us to capitalise on Zetron’s extensive distribution network, brand strength and customer loyalty.

Codan president for critical communications Scott French added:

…By combining Codan’s Land Mobile Radio products and solutions with Zetron’s Command & Control capability, we will be in a position to better serve the growing NG911 market, whilst maximising value and choice for our customers.

The Codan share price has jumped to almost 180% since this time last year, reflecting positive investor sentiment.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Codan (ASX:CDA) share price will be on focus today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!