CFX - For Colfax Breaking Up Looks Like A Value-Creation Opportunity

• Management targets for the separate FabTech and MedTech segments look ambitious (FabTech on margins, MedTech on top-line growth), but the businesses still look more valuable separated than together.
• FabTech has been outperforming Lincoln lately, but ongoing weakness in oil/gas and conventional power gen will create some challenges, though ongoing investment in new technologies is a strong positive.
• The bulk of MedTech's revenue comes from slower-growing markets where meaningful market outgrowth looks challenging, but mid-single-digit growth and healthy margins support a 3.75x revenue multiple.
• Valued separately, there's an argument for Colfax's parts to be worth closer to $55, making these shares at least worth a closer look.

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