Prestige Consumer Healthcare Inc. (PBH): A Bull Case Theory

Core Thesis - Prestige Consumer Healthcare Inc. (PBH) is viewed as a compelling investment opportunity following its acquisition of Stampede Culinary Partners for $662.5 million, which is expected to enhance its EBITDA significantly [2][3]. Company Overview - PBH develops, manufactures, markets, distributes, and sells over-the-counter health and personal care products in North America, Australia, and internationally [2]. Acquisition Details - The acquisition of Stampede Culinary Partners is structured with $512.5 million in cash, $150 million in stock (approximately 5% dilution), and an additional $100 million earn-out over two fiscal years [2]. - This acquisition is projected to contribute approximately 15% to PBH's EBITDA, with initial mid-single-digit EPS accretion expected to rise to high-single-digit accretion after operational efficiencies are realized, effectively reducing the acquisition multiple to 7.5x [3]. Financial Performance - PBH's earnings run-rate has grown significantly since 2017, although the stock trades near mid-2017 levels. Current-year EPS valuation is around 21x, while next year's estimates reflect a 39% EPS growth, implying a multiple closer to 15x [4]. - The company has a dividend yield above 3% and is positioned for strong growth through strategic acquisitions and organic expansion [5]. Strategic Positioning - PBH's growth strategy has historically combined acquisitions and organic expansion, positioning it as a specialty food producer and distributor in Canada and the U.S. [3]. - Successful integration of Stampede and leveraging operational efficiencies could unlock significant shareholder value while expanding PBH's presence in North America's specialty food sector [5].