BNP Paribas says SATS’ (S58.SG) buy of Japan Airlines 50.7% stake in TFK Corp for $122 million “strategically positive overseas endeavour.”

Stake buy is SATS’ first major M&A in recent years in in-flight catering segment, should provide entry into Japanese airline catering market, provide synergies with culinary operations, “which we think is a long-term positive for the group.”

Reckons SATS can leverage extensive client rapport to expand TFK’s portfolio.

But notes SATS “keeping mum as to whether TFK is actually profitable at present...We suspect TFK may not be hugely profitable, and in fact, could be loss-making currently. We expect the acquisition to be strategically positive but non-EPS-accretive as well as margin-dilutive, at least in the immediate near term.”