treehouse foods, inc
TRANSCRIPT
TreeHouse Foods, Inc. (NYSE: THS)
Mike Saheiha
Questions to Answer
I. What are your initial observations of
Treehouse Foods?
II. 2014-2015 Outlook?
III. Would you buy THS shares? Why?
IV. What type of company would be an
attractive target for THS?
Financial Overview
Company Overview
Outlook 2014-2015
Potential Acquisitions
Leveraged Buyout
Agenda
Financial Overview
Company Overview
Outlook 2014-2015
Potential Acquisitions
Leveraged Buyout
Agenda
Company Overview Operational Overview
Private Label Food Supplier
• Retail Grocery
• Foodservice/Manufacturers
• Regional Brands
Founded in 2005 (IPO same year)
• Composed entirely of acquisitions
• 11 total since 2005
Premise
• Private label growing at 2x brand label food service
• Continued acquisition of self-sustaining business will spur growth
Divisions of Bay Valley
• Bay Valley Foods
• E.D. Smith
• Sturm Foods
• S.T. Specialty Foods
• Cain’s
• Associated Brands (US/CAN)
Top Spots
• Pickle/Pepper supplier
• Private non-dairy creamer
• Shelf stable cheese/ pudding for
food service/manufacturing
• Private salad dressings
• Private soup
Company Overview Acquisitions
Year Company Offering
2005 Dean Specialty Foods (Corporate Foundation)
2006 Del Monte Soups
2007 San Antonio Farms Salsas
E.D. Smith Salad Dressings, Jams & Jellies, Pie-Fillings
2010 Sturm Foods Sugar-Free Drinks, Hot Cereals
S.T. Specialty Foods Mac & Cheese, Side Dishes
2013 Naturally Fresh, Inc. Dressings, Sauces, Marinades, Dips
Cain’s Foods Shelf Stable Mayonnaise, Dressings, Sauces
Associated Brands Powdered Drinks, Teas, Sweeteners
2014 Proternergy Natural Foods Soups & Gravy
Flagstone Foods Health Snacks
Company Overview Brands
Financial Overview
Company Overview
Outlook 2014-2015
Potential Acquisitions
Leveraged Buyout
Agenda
Market Statistics Market Activity
Key Statistics (as of 11/15/14)
Current Price $ 82.50
Dividend Yield 0.00%
Mkt Cap ($M) $ 3,492.23
Enterprise Value ($M) $ 5,033.23
52 Wk High $ 86.95
52 Wk Low $ 62.76
% off 52Wk Low 31.5%
Shares Outstanding 42.33
Insider Ownership 1.07%
Insider Transactions 8.8%
Institutional Ownership 94.3%
Short Ratio 6.17
Beta 0.930
Corporate AA Avg. 2.78%
Corporate AA Cur. 3.07%
Shares
• No Dividend Offered
• Selling well off 52-Week lows
Trading
• Insider Ownership Increasing
• Short Ratio High
• Adverse effect of rates
Summary
• Share price likely overextended
and generating high short
interest in adverse interest rate
environment
Fundamentals Market Activity
Earnings/Assets
• “Expensive Earnings”
• Earnings on Book Lows
• Cash Flow negative
• Weak Capitalization
Summary
• Weak overall capitalization and
earnings on assets in addition to
high PE suggest THS shares
overpriced.
Fundamental Ratios (MRFY)
P/E (cash adjusted) 37.6
EV/EBITDA 17.5
P/S 1.5
P/BV 2.0
P/Tang BV 2.3
FCF Yield -2.00%
ROE 5.36%
ROIC 1.83%
AFCF/PPE* -140.71%
Total Debt/Equity Ratio 0.9
Inventory Turnover 3.4
Receivables Turnover 10.2
Days Sales Outstanding 35.8
Current Ratio 2.98
Quick Ratio 0.09
Long Term Debt /Equity 0.91
Piotroski 4
Altman 3.7
Beneish -1.8
Earnings Revenues
$2,050.00 $2,182.00 $2,294.00
$2,982.20
$3,608.46
2011 2012 2013 2014E 2015E
Net Income
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
$-
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
2011 2012 2013 2014E 2015E
NET INCOME % of Sales
Summary
• Revenue expected to increase 30% yoy
• Net Income expected to increase 80% yoy
• Acquisitions in 2014 will change the earnings
character of THS Dramatically
Cash Flows Free Cash Flows Explained
$105.00
$245.00
$156.00
$205.00 $217.00 $192.00
$37.00
$884.00
$66.00 $100.00
$294.00
$1,273.00
2009 2010 2011 2012 2013 TTM
CFO CAPEX
Cash from Operations
• CAGR 15%
• Considerable Growth
Capital Expenditures
• Regular Acquisitions
• ~$2.3B in 5 years
Summary
• Strong growth is being
over-shadowed by large
acquisitions making
organic activity
indistinguishable from
inorganic
Questions to Answer
I.) What are your initial observations of
Treehouse Foods? Treehouse foods is a serial acquirer whose value is
derived from continuing acquisitions in a rapidly expanding
industry. Due to the high rate of acquisitions, efficiency
must become a priority or THS will face higher overhead
costs than necessary as well as untenable debt levels. You
as principal banker will benefit from advising regular
acquisitions of THS as well as restructuring efforts by
utilizing their sound earnings foundation as a basis for all
transactions.
Financial Overview
Company Overview
Outlook 2014-2015
Potential Acquisitions
Leveraged Buyout
Agenda
Outlook 2014-2015 Revenues
2014
• Wall Street Average
Estimate 30% yoy
• 4Q 2014 growth of 42%
qoq
2015
• Wall Street Average
Estimate 21% yoy
• My Estimate 39%
Summary
• Aggressive acquisition
policy will be greatest
driving force of growth
$619.00 $628.00
$796.00
$939.00 $976.56
$1,015.62 $1,056.25
$1,098.50
2014-03 2014-06 2014-09 2014-12 2015-03 2015-06 2015-09 2015-12
Explained
Comparable Asset Model Valuation Spread
2014
• The range of competitors
is broad in terms of
market cap and
revenues
2015
• A tightening range
improves confidence in a
sustainable price
increase
Summary
• THS could well trade at a
level with its competitors
in a market driven by
consolidation
Explained
$63.71 $62.76
$51.44
$68.03
$72.60
$102.96
$86.95 $89.29
$112.97
$122.64
Target Range 52-Week 2014 2015 2016
Questions to Answer
II.) 2014-2015 Outlook? Based on Wall Street estimates, the outlook for
Treehouse Foods is bright, with growth being underpinned
by a very aggressive expansion policy. Further, a brief
analysis of their earnings suggests that THS could easily
surpass estimates for 2015. THS holds great potential as
they continue to bolster their earnings by expanding in a
fast growing sector and the opportunity to begin trading in a
range along with its competitors is open.
Operating Model Assumptions
THS will continue to acquire comparable companies annually
• Market Cap $200-500 M
• Revenue ~40% Sale Price (P/S 2.5)
THS will expand assets 8-12% annually
THS will pay down debt as soon as possible
• 20-30% within 5 years after leveraged acquisition
THS will issue dividend
• 40% rate in FY 2016
Current interest rate environment continues into 2015
THS shares see no drastic changes in market volatility
Discounted Cash Flows
Key Statistics
Current Price 82.50$
Dividend Yield 0%
Shares Outstanding 42.3
Mkt Cap ($M) 3,500.0$
Enterprise Value (163.6)$
52 Wk High 86.95$
52 Wk Low 62.76$
% off 52Wk Low 31%
Beta 0.93
Corporate AA -30 days 2.78%
Corporate AA Current 3.07%
Free Cash Flows
Historic Projections
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E
EBIAT 100.00$ 138.00$ 148.00$ 140.00$ 136.00$ 135.17$ 262.03$ 296.90$ 325.56$ 347.91$
Depreciation & Amortization 47.0 70.0 83.0 98.0 109.0 121.2 72.2 83.6 94.4 104.5
Net Working Capital Adjustments
Total Current Asset Adjustment (70.0) (27.0) (120.0) (62.0) (226.0) (29.4) (44.2) (63.6) (6.4)
Total Current Liability Adjustment 53.0 (32.0) 16.0 53.0 258.4 25.7 72.5 84.8 210.9
Change in Net Working Capital (17.0) (59.0) (104.0) (9.0) 32.4 (3.8) 28.3 21.2 204.5
Capital Expenditures 37.0 40.0 69.0 70.0 83.8 109.2 126.5 95.2 158.2
Unlevered Free Cash Flow 154.0$ 132.0$ 65.0$ 166.0$ 205$ 221.2$ 282.3$ 345.9$ 498.7$
WACC 10.00%
Discount Period Accounting Period Ends: 12 1.000 2.000 3.000 4.000 5.000
Discount Factor 0.91 0.83 0.75 0.68 0.62
Present Value of Free Cash Flow 154.0$ 132.0$ 65.0$ 166.0$ 186.4$ 182.8$ 212.1$ 236.3$ 309.7$
Discounted Cash Flows
Step-wise
• Using a proprietary method to project “free cash flow
yields”
• Prevailing Corporate AA rates and Beta taken into
consideration
• Yield then used to “discover” fair price of THS shares
in its current market environment for a given time
horizon
• Fair price is discounted according to AA ratio and
Beta
HEIBAAS Valuation
Projection Period 4
Current FCF/S 3.92$
5yr Average FCF/S 3.05$
Average Projected FCF/S 3.95$
5yr Average FCY 3.70%
Projected Growth Rate 6.64%
Average AA Yield 2.78%
Current AA Yield 3.07%
Corporate AA Yield Ratio 0.91
Heibaas Valuation 90.6$
Beta Discount Rate 9.30%
Purchase Price 82.2$
Current Price 82.50$
Projected Free Cash Flow Yield
2013 2014E 2015E 2016E 2017E 2018E
8.00% 4.94% 4.72% 4.76% 4.82% 5.07%
9.00% 4.90% 4.66% 4.68% 4.71% 4.92%
10.00% 4.8% 4.85% 4.60% 4.59% 4.60% 4.79%
11.00% 4.81% 4.54% 4.51% 4.50% 4.66%
12.00% 4.76% 4.48% 4.43% 4.40% 4.53%
Projected Growth Rate
2013 2014E 2015E 2016E 2017E 2018E
8.00% 33.51% 12.98% 8.77% 6.82% 6.48%
9.00% 32.28% 12.21% 8.11% 6.20% 5.87%
10.00% 31.08% 11.46% 7.46% 5.60% 5.28%
11.00% 29.90% 10.72% 6.82% 5.01% 4.69%
12.00% 28.74% 9.99% 6.19% 4.43% 4.13%
Discounted Cash Flows Valuation Spread Explained
Theory
• Most equities trade on a
multiple of free cash flows
• Predict FCF and historic FCF
yields help develop potential
trading range
• Discounted to Corporate AA
rates and Beta
• If shares trade at or below the
“fair price” for a time horizon, it
is considered a “Buy”
Interpreted
• FY 2015 fair price range
$73.87-$96.41
• THS shares will trade in that
range and higher leading up to
FY 2015 earnings release
Conclusion: Buy
$71.34
$62.76
$66.72
$73.87 $76.12
$77.25
$94.52
$86.95 $85.91
$96.41
$100.41 $102.91
TargetRange
52-Week 2014E 2015E 2016E 2017E
*See appendix for accompanying
technical analysis
Questions to Answer
III.) Would you buy THS shares? Why? THS shares have much potential to appreciate with
continued M&A activity. However, its position is currently
unstable given the presence of formidable competitors and
the inherent risks of a rapid acquisition policy. With time,
THS may stabilize and improve efficiency becoming an
attractive long term holding. For the time being, the
greatest value to be derived is in managing their M&A
transactions.
Financial Overview
Company Overview
Outlook 2014-2015
Potential Acquisitions
Leveraged Buyout
Agenda
Potential Target Criteria Transaction
• Market capitalization no more
than two-thirds THS
• Comparable earnings
multiples
• Strong revenue growth to fit
“bolt -on” strategy
• High returns on book with low
debt burden
• The high price and
momentum of THS shares in
the current M&A environment
would make an all-stock deal
attractive
• Earnings must be robust to
support obligations of
transaction (interest/fees)
given the capital
encumbrance of THS
• Earnings on Assets needed to
justify transaction
B&G Foods Overview Statistics
Revenue Growth Transaction
• Producer of private label foods for
food distribution, retail, wholesale
• Operates similarly to THS
including numerous acquisitions
• Breadth of both product offerings
and synergies generate value
The deal would be completed in the
midst of BGS expansion with stock
and debt and represents the last
major acquisition for some time due to
scale.
BGS Average
Market Cap $1,550 --
PE 32.3 28.0
Revenue Growth (3yr Avg) 12.1% 14.5%
Net Income Growth (3yr Avg) 17.4% 37.9%
Net Margin 5.9% 5.0%
ROE 13.8% 7.5%
Debt/ Equity 2.9 0.8
$544.00
$634.00
$725.00
$857.80 $888.70
2011-12 2012-12 2013-12 2014-12 E 2015-12 E
B&G Foods Transaction 5-Year DCF
Terms of Transaction
Market Capitalization $ 1,600.00
TTM Revenues 857.8
Price/ Sales 1.9
Offer Price $ 1,930.05
Price/ Sales 2.25
Premium 21%
Financing
Debt 482.5
Stock 1,447.5
Debt/ Equity 0.97
Discounted Cash Flows (Less: Interest)
PV of Free Cash Flow $ 831.63
Enterprise Value 7,977.1
FV of Enterprise Value 10,675.1
PV of Enterprise Value 6,628.4
Terminal Value $ 7,460.03
Net Debt 3,029.5
PV of Equity $ 4,430.5
Shares 59.9
Implied Value $ 73.99
% of Current -10%
J&J Snack Foods Overview Statistics
Revenue Growth Transaction
• Producer of frozen foods and
snack items
• Operates similarly to THS
including numerous acquisitions
• Maker of Luigi’s Italian Ice, ICEE,
Slush Puppie, and Super Pretzels
The deal would increase THS
considerably with a high earning
competitor and represents the last
major acquisition for some time due to
scale.
JJSF Average
Market Cap $1,920 --
PE 27.6 28.0
Revenue Growth (3yr Avg) 7.6% 14.5%
Net Income Growth (3yr Avg) 10% 37.9%
Net Margin 7.7% 5.0%
ROE 13.3% 7.5%
Debt/ Equity 0 0.8
$744.00 $831.00 $868.00 $904.00
$957.17
2011-09 2012-09 2013-09 2014-09 2015-12 E
J&J Snack Foods Transaction 5-Year DCF
Terms of Transaction
Market Capitalization $ 1,900.00
TTM Revenues 919.0
Price/ Sales 2.07
Offer Price $ 2,300.00
Price/ Sales 2.50
Premium 21%
Financing
Debt 575.0
Stock 1,725.0
Debt/ Equity 0.62
Discounted Cash Flows (Less: Interest)
PV of Free Cash Flow $ 940.4
Enterprise Value 7,827.0
FV of Enterprise Value 10,474.3
PV of Enterprise Value 6,503.7
Term $ 7,444.1
Net Debt 2,035.0
Pv Equity $ 5,409.1
Shares 63.24
Implied Value $ 85.53
% of Current 4%
Financial Overview
Company Overview
Outlook 2014-2015
Potential Acquisitions
Leveraged Buyout
Agenda
Leveraged Buyout Premise Free Cash Flows
• THS sells for well under $10B which means it could be a target
• Considering the high leverage of THS, leveraged buyout not recommended
Assumptions
Assumptions
Base Year 2014
Sponsor Target IRR 25.00%
Exit Mulitple 5.0x
Tax Rate 33.92%
Net Debt $1,528
Ownership at Exit 10%
Implied Share Price
Terminal EBITDA $ 696.17
Exit Multiple 5.0x
Enterprise Value 3,500.0
Less: Net Debt 1,528.0
Equity Value 5,028.0
Sponsor Ownership at Exit 90.0%
Sponsor Equity Value at Exit 4,525.2
Sponsor Expected IRR 25.0%
Sponsor Equity at Closing 1,482.8
Net Debt at Closing 1,528.0
Implied EV at Closing $ 3,010.8
PV of FCF 198
Termial Value 3,208.8
Diluted Shares Outstanding 42
Implied Share Price $ 75.80
Questions to Answer
IV.) What type of company would be an
attractive target for THS? The most attractive target for THS is a firm with a similar
business model in the private label packaging industry that
generates adequate earnings to cover the interest burden
of the acquisition. The target should also produce notable
products with a low debt burden to accommodate future
leveraging. Considering that THS has several large
competitors with similarly aggressive expansion strategies,
it would be best that they acquired one of these
competitors to relieve pressure and improve earnings.
Appendix
Comparable Assets Comparable Asset Model yahooFinance
TKR DMND BGS JJSF LNCE THS FLO HAIN INGR Average
Market Data
Market Cap 952.2 1,580.0 1,920.0 2,080.0 3,500.0 4,070.0 5,460.0 5,870.0
Enterprise Value 1,600.0 2,590.0 1,830.0 2,420.0 5,020.0 4,730.0 6,260.0 7,130.0
PEG Ratio (FyF) 1.0 1.5 2.6 2.2 1.9 1.7 1.8 1.8
PE 0.0 32.3 27.6 29.5 40.7 21.3 41.3 15.3 28.0
PB 3.3 4.4 3.5 2.1 2.0 3.4 3.4 2.6 3.0
PS 0.9 1.9 2.1 1.2 1.2 1.1 2.4 1.0 1.5
Revenue Growth (3yr Average) (3.6) 12.1 7.6 21.6 8.1 13.4 24.8 12.8 14.5
Net Income Growth (3yr Average) 0.0 17.4 10.0 215.3 (1.5) 19.0 36.5 32.8 37.9
Operating Margin (3.2) 15.3 11.6 6.6 7.2 7.8 9.4 10.2 8.9
Net Margin (19.0) 5.9 7.7 10.4 2.9 5.0 5.7 6.5 5.0
ROA (13.9) 3.1 1.1 10.4 2.4 7.5 4.9 7.4 4.9
ROE (73.1) 13.8 13.3 19.4 5.3 1.2 9.1 17.1 7.5
Debt/ Equity 2.2 2.9 0.0 0.4 0.9 0.7 0.5 0.9 0.8
Financials
Balance Sheet
Total Assets 1,193.0 1,484.0 705.0 1,765.0 2,721.0 2,504.0 2,965.0 5,360.0
Total Debt 909.0 1,106.0 142.0 846.0 1,448.0 1,428.0 1,345.0 2,956.0
Equity 284.0 378.0 563.0 919.0 1,273.0 1,076.0 1,620.0 2,404.0
Cash Flows
Free Cash Flow (122.0) 100.0 68.0 66.0 136.0 171.0 143.0 321.0
Income Statement TTM
Revenue 865.0 725.0 919.0 1,761.0 2,294.0 3,751.0 2,154.0 6,653.0
EBITDA
Operating Income (27.0) 154.0 107.0 127.0 178.0 335.0 228.0 613.0
Net Income Growth (3yr Average) (165.0) 52.0 72.0 79.0 87.0 231.0 140.0 396.0
Comparable Assets Multiples Analysis
2014 STDEV
Ev/Revenues 1.85 3.02 1.99 1.42 1.68 1.25 2.91 1.24 0.65
EV/EBITDA -20.25 14.90 12.63 13.34 17.31 9.93 22.68 10.14 12.10
EV/Operating Income -59.26 13.95 17.61 19.55 25.38 14.00 27.46 13.49 26.28
PE -5.77 25.69 26.74 27.21 39.93 17.48 39.00 17.19 13.57
2015 STDEV
Ev/Revenues 1.73 2.91 1.91 1.31 1.39 1.23 2.28 1.22 0.56
EV/EBITDA -18.99 14.38 12.13 12.37 11.71 9.73 17.77 9.97 10.71
EV/Operating Income -14.29 13.46 16.92 18.13 14.07 13.71 21.54 13.26 10.33
PE -3.28 24.80 25.68 25.24 19.63 17.12 30.59 16.89 9.71
2016 STDEV
Ev/Revenues 1.66 2.69 1.84 1.14 1.20 1.12 2.10 1.10 0.54
EV/EBITDA -18.21 13.28 11.67 10.70 10.12 8.91 16.40 8.98 10.07
EV/Operating Income -13.70 12.43 16.28 15.68 12.17 12.55 19.87 11.94 9.65
PE -3.15 22.90 24.71 21.83 16.17 15.67 28.23 15.22 9.02
Comparable Assets Multiples Analysis Valuation
2014 High Mean Median Low 2014 2015 2016
Ev/Revenues 3.02 1.78 1.77 1.24 EV/Revenues
EV/EBITDA 22.68 10.08 12.98 -20.25 Mean 1.78 1.75 1.61
EV/Operating Income 27.46 9.02 15.81 -59.26 Median 1.77 1.56 1.43
PE 39.93 23.43 26.21 -5.77 Low 1.24 1.22 1.10
2015 Revenues 2,982.0 3,608.5 4,182.1
Ev/Revenues 2.91 1.75 1.56 1.22
EV/EBITDA 17.77 8.63 11.92 -18.99 Enterprise Value
EV/Operating Income 21.54 12.10 13.89 -14.29 Mean 5,304.9 6,306.5 6,715.8
PE 30.59 19.58 22.22 -3.28 Median 5,267.9 5,628.7 5,975.9
Low 3,704.1 4,405.6 4,599.1
2016
Ev/Revenues 2.69 1.61 1.43 1.10 Net Debt
EV/EBITDA 16.40 7.73 10.41 -18.21 Long Term Debt 1559 1559 1559
EV/Operating Income 19.87 10.90 12.49 -13.70 Cash 31 31 31
PE 28.23 17.70 19.00 -3.15
Implied Equity Value
Mean 3,776.9 4,778.5 5,187.8
Median 3,739.9 4,100.7 4,447.9
Low 2,176.1 2,877.6 3,071.1
Price 82.5 82.5 82.5
Shares Outstanding 42.3 42.3 42.3
Per Share
Mean 89.29 112.97 122.64
Median 88.41 96.94 105.15
Low 51.44 68.03 72.60
Premium
Mean 8% 37% 49%
Median 7% 18% 27%
Low -38% -18% -12%
Per Share Value
Target Range52-Week 2014 2015 2016
102.96$ 86.95$ 89.29$ 112.97$ 122.64$
39.25$ 24.19$ 37.84$ 44.94$ 50.04$
63.71$ 62.76$ 51.44$ 68.03$ 72.60$
Income Statement Operating Model Historic Quarterly Projections
2009 2010 2011 2012 2013 2013-09 2013-12 2014-03 2014-06 2014-09 2014-12E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Revenue 1,512.0 1,817.0 2,050.0 2,182.0 2,294.0 567.0 660.0 619.0 628.0 796.0 939.2 2,982.2 3,608.5 4,182.1 4,719.0 5,227.3 5,998.6 6,598.5 7,258.3 7,984.2 8,782.6
Cost of revenue 1,185.0 1,386.0 1,577.0 1,728.0 1,818.0 452.0 524.0 486.0 492.0 637.0 743.6 2,358.6 2,834.0 3,284.7 3,712.9 4,119.9 4,721.2 5,192.1 5,712.2 6,284.6 6,913.4
Gross profit 326.0 431.0 473.0 454.0 476.0 115.0 137.0 133.0 136.0 159.0 195.6 623.6 774.5 897.4 1,006.1 1,107.4 1,277.4 1,406.4 1,546.2 1,699.5 1,869.1
Operating expenses
Sales, General, & Administrative 131.0 151.0 156.0 143.0 158.0 39.0 53.0 64.0 57.0 73.0 85.2 279.2 283.4 327.2 367.8 408.2 475.0 517.7 569.4 626.5 689.7
Restructuring, merger and acquisition 6.0 1.0 4.0 0.9 0.9 2.5 3.1 3.7 4.4 4.5 5.1 5.6 6.2 6.8
Other operating expenses 7.0 28.0 41.0 37.0 35.0 9.0 10.0 11.0 11.0 15.0 16.5 53.5 59.7 71.0 80.6 88.1 101.8 111.6 123.0 135.3 148.7
Total operating expenses 138.0 179.0 197.0 180.0 193.0 48.0 63.0 75.0 68.0 88.0 102.6 333.6 345.6 401.3 452.1 500.7 581.2 634.4 698.0 768.0 845.2
0.0
EBITDA 188.0 252.0 276.0 274.0 283.0 67.0 74.0 58.0 68.0 71.0 93.0 290.0 428.9 496.1 554.0 606.8 696.2 772.0 848.1 931.5 1,023.9
Depreciation & Amortization 47.0 70.0 83.0 98.0 109.0 25.0 28.0 27.0 26.0 30.0 38.2 121.2 72.2 83.6 94.4 104.5 120.0 118.8 130.6 143.7 158.1
Operating income 131.0 177.0 188.0 177.0 178.0 41.0 52.0 50.0 45.0 48.0 54.8 197.8 356.7 412.4 459.7 502.2 576.2 653.2 717.5 787.8 865.8
Other income (expense) 10.0 6.0 5.0 -1.0 -4.0 1.0 -6.0 -19.0 -2.0 -7.0 -10.3 -38.3 -11.5 -14.9 -18.8 -23.4 -27.3 -27.3 -30.5 -34.1 -37.8
EBIT 141.0 183.0 193.0 176.0 174.0 42.0 46.0 31.0 43.0 41.0 65.1 180.1 345.2 397.5 440.9 478.9 548.9 626.0 686.9 753.7 828.0
Interest Expense 18.0 46.0 53.0 52.0 49.0 13.0 12.0 11.0 9.0 10.0 17.5 47.5 83.8 80.4 76.6 64.6 105.9 105.9 97.4 85.7 70.3
Income before taxes 122.0 136.0 140.0 124.0 125.0 29.0 34.0 20.0 34.0 31.0 47.6 132.6 261.4 317.2 364.3 414.2 443.1 520.1 589.5 668.0 757.8
Provision for income taxes 41.0 45.0 45.0 36.0 38.0 7.0 12.0 6.0 12.0 11.0 16.0 45.0 83.1 100.6 115.3 131.0 141.0 165.0 187.0 211.9 240.4
Net income 81.0 91.0 94.0 88.0 87.0 23.0 23.0 14.0 22.0 20.0 31.6 87.6 178.3 216.5 249.0 283.3 302.0 355.1 402.6 456.1 517.4
Earnings per Share
Basic 2.54$ 2.59$ 2.64$ 2.44$ 2.39$ 0.62$ 0.62$ 0.39$ 0.59$ 0.48$ 0.75$ 2.07$ 4.18$ 5.02$ 5.70$ 6.39$ 6.68$ 7.68$ 8.47$ 9.28$ 10.11$
Diluted 2.48$ 2.51$ 2.56$ 2.38$ 2.33$ 0.61$ 0.61$ 0.38$ 0.57$ 0.47$ 0.73$ 2.02$ 4.08$ 4.90$ 5.57$ 6.25$ 6.54$ 7.52$ 8.29$ 9.09$ 9.92$
Dividends
Dividends Per Share -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 2.01$ 2.28$ 2.55$ 2.67$ 3.07$ 3.39$ 3.71$ 4.04$
Rate % Net Income 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 40% 40% 40% 40% 40% 40% 40% 40%
EPS Ex. Dividend 2.54$ 2.59$ 2.64$ 2.44$ 2.39$ 0.62$ 0.62$ 0.39$ 0.59$ 0.48$ 0.75$ 2.07$ 4.18$ 3.01$ 3.42$ 3.83$ 4.01$ 4.61$ 5.08$ 5.57$ 6.07$
Weighted average shares outstanding
Basic 32.0 35.0 36.0 36.0 36.0 36.0 37.0 37.0 37.0 41.0 42.3 42.3 42.7 43.1 43.7 44.3 45.2 46.2 47.6 49.2 51.2
Diluted 33.0 36.0 37.0 37.0 37.0 37.0 38.0 38.0 38.0 42.0 43.3 43.3 43.7 44.1 44.7 45.3 46.2 47.2 48.6 50.2 52.2
Assumptions on Income Statement
2009 2010 2011 2012 2013 2013-09 2013-12 2014-03 2014-06 2014-09 2014-12E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Organic Revenue Growth 20% 13% 6% 5% 16% -6% 1% 27% 18% 30% 21% 15% 12% 10% 10% 10% 10% 10% 10%
Revenue Growth 20% 13% 6% 5% 16% -6% 1% 27% 18% 30% 21% 16% 13% 11% 15% 10% 10% 10% 10%
COGS % Sales 78% 76% 77% 79% 79% 80% 79% 79% 78% 80% 79% 79% 79% 79% 79% 79% 79% 79% 79% 79% 79%
Gross Margins 22% 24% 23% 21% 21% 20% 21% 21% 22% 20% 21% 21% 21% 21% 21% 21% 21% 21% 21% 21% 21%
Sales, General, & Administrative % Sales 9% 8% 8% 7% 7% 7% 8% 10% 9% 9% 9% 9% 8% 8% 8% 8% 8% 8% 8% 8% 8%
Restructuring 0% 0% 0% 0% 0% 0% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Other Operating % of Sales 0% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
Total Operating Expenses % of Sales 9% 10% 10% 8% 8% 8% 10% 12% 11% 11% 11% 11% 10% 10% 10% 10% 10% 10% 10% 10% 10%
EBITDA % Sales 12% 14% 13% 13% 12% 12% 11% 9% 11% 9% 10% 10% 12% 12% 12% 12% 12% 12% 12% 12% 12%
D&A % Sales 3% 4% 4% 4% 5% 4% 4% 4% 4% 4% 4% 4% 2% 2% 2% 2% 2% 2% 2% 2% 2%
Operating Income % Sales 9% 10% 9% 8% 8% 7% 8% 8% 7% 6% 6% 7% 10% 10% 10% 10% 10% 10% 10% 10% 10%
Other Income (Expense) % Sales 1% 0% 0% 0% 0% 0% -1% -3% 0% -1% -1% -1% 0% 0% 0% 0% 0% 0% 0% 0% 0%
EBIT % Sales 9% 10% 9% 8% 8% 7% 7% 5% 7% 5% 7% 6% 10% 10% 9% 9% 9% 9% 9% 9% 9%
Interest Expense % Sales 1% 3% 3% 2% 2% 2% 2% 2% 1% 1% 1% 2% 5% 5% 5% 5% 5% 5% 5% 5% 5%
Income Before Taxes % Sales 8% 7% 7% 6% 5% 5% 5% 3% 5% 4% 5% 4% 7% 8% 8% 8% 7% 8% 8% 8% 9%
Provision for Income Taxes % EBT 34% 33% 32% 29% 30% 24% 35% 30% 35% 35% 34% 34% 32% 32% 32% 32% 32% 32% 32% 32% 32%
Net Income % Sales 5% 5% 5% 4% 4% 4% 3% 2% 4% 3% 3% 3% 5% 5% 5% 5% 5% 5% 6% 6% 6%
Balance Sheet Balance Sheet Historic Quarterly Projections
2009 2010 2011 2012 2013 2013-09 2013-12 2014-03 2014-06 2014-09 2014-12 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Assets
Current assets
Cash
Cash and cash equivalents 4.0 6.0 3.0 94.0 46.0 108.0 46.0 16.0 17.0 22.0 331.5 738.5 786.2 725.5 712.6 675.7 673.3 685.7 692.0 689.5 645.5
Short-term investments 9.0 8.0 9.0 9.0 9.0 9.0 10.6 10.6 6.2 7.1 8.1 9.5 13.7 13.9 14.7 16.0 17.4
Total cash 4.0 6.0 3.0 94.0 55.0 116.0 55.0 24.0 26.0 31.0 342.1 749.1 792.4 732.7 720.7 685.2 687.0 699.6 706.7 705.5 662.9
Receivables 87.0 127.0 115.0 125.0 153.0 134.0 153.0 151.0 155.0 225.0 203.2 203.2 163.5 126.5 102.5 78.2 113.3 101.2 86.4 68.5 68.5
Inventories 265.0 287.0 329.0 347.0 406.0 423.0 406.0 413.0 499.0 677.0 561.8 561.8 642.1 714.2 792.7 813.8 907.0 1,025.1 1,015.1 995.5 964.4
Deferred income taxes 3.0 3.0 4.0 8.0 22.0 8.0 22.0 22.0 13.0 9.0 20.5 20.5 19.7 23.4 27.6 32.1 38.2 39.9 43.6 48.2 53.4
Prepaid expenses 7.0 13.0 13.0 0.0 14.0 17.0 14.0 17.0 25.0 32.0 33.9 33.9 23.5 28.3 32.4 36.7 50.9 53.9 57.3 62.4 68.0
Other current assets 4.0 4.0 4.0 14.0 0.0 0.0 0.0 0.0 0.0 0.0 1.6 1.6 1.6 2.3 3.1 3.9 9.4 9.4 9.4 9.4 9.4
Total current assets 371.0 441.0 468.0 588.0 650.0 699.0 650.0 627.0 719.0 974.0 1,163.1 1,570.1 1,642.8 1,627.4 1,679.0 1,649.9 1,805.8 1,929.2 1,918.7 1,889.5 1,826.5
Non-current assets
Property, plant and equipment
Gross property, plant and equipment 428.0 576.0 637.0 713.0 800.0 752.0 800.0 791.0 849.0 904.0 956.7 956.7 1,010.9 1,094.5 1,140.7 1,242.7 1,493.1 1,638.3 1,798.0 1,973.6 2,166.8
Accumulated Depreciation -152.0 -190.0 -231.0 -288.0 -338.0 -327.0 -338.0 -335.0 -352.0 -364.0 -396.7 -396.7 -450.8 -522.0 -601.9 -689.8 -844.4 -930.2 -1,024.5 -1,128.3 -1,242.5
Net property, plant and equipment 276.0 386.0 407.0 425.0 462.0 425.0 462.0 456.0 497.0 540.0 560.0 560.0 560.0 572.5 538.8 552.9 648.7 708.1 773.5 845.3 924.4
Goodwill 575.0 1,076.0 1,068.0 1,073.0 1,119.0 1,071.0 1,119.0 1,113.0 1,164.0 1,674.0 1,747.3 1,747.3 1,747.3 1,779.5 1,814.4 1,850.7 2,098.2 2,098.2 2,098.2 2,098.2 2,098.2
Intangible assets 163.0 464.0 438.0 418.0 476.0 412.0 476.0 464.0 512.0 738.0 761.5 761.5 779.6 817.6 859.6 905.0 1,066.0 1,099.0 1,135.3 1,175.2 1,219.1
Other long-term assets 24.0 23.0 21.0 14.0 19.0 14.0 16.0 20.0 21.0 22.1 22.1 22.1 22.6 23.1 23.7 27.4 27.4 27.4 27.4 27.4
Total non-current assets 1,014.0 1,950.0 1,936.0 1,937.0 2,071.0 1,927.0 2,071.0 2,049.0 2,193.0 2,972.0 3,090.9 3,090.9 3,109.0 3,192.1 3,235.9 3,332.2 3,840.3 3,932.7 4,034.3 4,146.1 4,269.0
Total assets 1,384.0 2,391.0 2,405.0 2,526.0 2,721.0 2,626.0 2,721.0 2,676.0 2,912.0 3,947.0 4,254.0 4,661.0 4,751.8 4,819.5 4,914.8 4,982.2 5,646.1 5,861.9 5,953.0 6,035.6 6,095.6
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt 1.0 1.0 2.0 2.0 2.0 2.0 2.0 2.0 4.0 4.0 119.6 119.6 196.0 198.3 200.6 349.7 472.2 478.1 484.1 490.2 496.3
Accounts payable 109.0 121.0 154.0 155.0 154.0 163.0 219.0 244.0 292.0 292.0 236.0 286.7 346.2 393.4 497.1 531.7 569.9 622.7 680.5
Accrued liabilities 60.0 37.0 84.0 60.0 84.0 54.0 33.0 78.0 86.7 86.7 92.0 111.6 134.5 149.2 188.6 199.4 216.4 236.7 258.9
Other current liabilities 149.0 202.0 27.0 37.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total current liabilities 150.0 203.0 171.0 187.0 240.0 216.0 240.0 219.0 293.0 327.0 498.4 498.4 524.0 596.6 681.4 892.2 1,157.9 1,209.2 1,270.4 1,349.5 1,435.7
Non-current liabilities
Long-term debt 402.0 976.0 903.0 898.0 939.0 909.0 939.0 900.0 1,017.0 1,559.0 1,825.0 1,825.0 1,825.0 1,751.5 1,667.9 1,408.3 2,306.4 2,306.4 2,121.9 1,867.3 1,531.2
Deferred taxes liabilities 45.0 195.0 202.0 212.0 229.0 216.0 229.0 228.0 241.0 307.0 307.0 307.0 307.0 307.0 307.0 307.0 307.0 307.0 307.0 307.0 307.0
Other long-term liabilities 31.0 39.0 54.0 49.0 40.0 40.0 40.0 38.0 26.0 36.0 37.9 37.9 37.9 38.7 39.6 40.6 47.0 47.0 47.0 47.0 47.0
Total non-current liabilities 478.0 1,210.0 1,160.0 1,160.0 1,208.0 1,165.0 1,208.0 1,166.0 1,283.0 1,901.0 2,169.9 2,169.9 2,169.9 2,097.2 2,014.5 1,755.9 2,660.4 2,660.4 2,475.8 2,221.2 1,885.1
Total liabilities 628.0 1,413.0 1,331.0 1,347.0 1,448.0 1,381.0 1,448.0 1,384.0 1,576.0 2,228.0 2,668.2 2,668.2 2,693.9 2,693.8 2,695.9 2,648.1 3,818.2 3,869.5 3,746.2 3,570.7 3,320.8
Stockholders' equity
Common stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Additional paid-in capital 588.0 703.0 715.0 727.0 749.0 740.0 749.0 765.0 777.0 1,153.0 1,161.1 1,161.1 1,191.4 1,228.2 1,272.8 1,327.8 1,397.4 1,484.4 1,592.0 1,725.3 1,890.9
Retained earnings 195.0 286.0 381.0 469.0 556.0 533.0 556.0 570.0 592.0 612.0 643.6 643.6 821.9 951.8 1,101.2 1,271.2 1,452.4 1,665.5 1,907.0 2,180.7 2,491.1
Accumulated other comprehensive income -27.0 -12.0 -22.0 -17.0 -32.0 -28.0 -32.0 -44.0 -33.0 -47.0 -219.0 188.0 44.6 -54.3 -155.0 -264.9 -1,021.9 -1,157.5 -1,292.3 -1,441.2 -1,607.3
Total stockholders' equity 756.0 978.0 1,074.0 1,179.0 1,273.0 1,246.0 1,273.0 1,292.0 1,336.0 1,719.0 1,585.8 1,992.8 2,057.9 2,125.7 2,219.0 2,334.0 1,827.9 1,992.4 2,206.7 2,464.8 2,774.8
Total liabilities and stockholders' equity 1,384.0 2,391.0 2,405.0 2,526.0 2,721.0 2,626.0 2,721.0 2,676.0 2,912.0 3,947.0 4,254.0 4,661.0 4,751.8 4,819.5 4,914.8 4,982.2 5,646.1 5,861.9 5,953.0 6,035.6 6,095.6
Cash Flows Cash Flows Historic Quarterly Projections
2009 2010 2011 2012 2013 2013-09 2013-12 2014-03 2014-06 2014-09 2014-12 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Cash Flows From Operating Activities
Net income 81.0 91.0 94.0 88.0 87.0 23.0 23.0 14.0 22.0 20.0 31.6 87.6 87.6 178.3 216.5 249.0 283.3 302.0 355.1 402.6 456.1
Depreciation & amortization 47.0 70.0 83.0 98.0 109.0 25.0 28.0 27.0 26.0 30.0 38.2 121.2 72.2 83.6 94.4 104.5 120.0 118.8 130.6 143.7 158.1
Deferred income taxes 19.0 9.0 15.0 6.0 (12.0) (1.0) (13.0) (2.0) 1.0 (2.0) 11.5 8.5 (0.7) 3.7 4.1 4.5 6.1 1.7 3.8 4.6 5.1
Stock based compensation 13.0 16.0 15.0 13.0 16.0 5.0 4.0 4.0 6.0 7.0 8.1 25.1 4.4 (0.7) (0.7) (1.2) (2.6) (0.2) (0.8) (1.3) (1.4)
Receivables (40.0) 12.0 (10.0) (28.0) (134.0) (19.0) 2.0 (4.0) (70.0) 33.7 (38.3) 39.7 42.2 29.6 30.1 4.9 12.0 14.8 18.0 0.0
Inventory (14.0) 34.0 (43.0) (8.0) (11.0) (24.0) 56.0 (10.0) (46.0) (54.0) 150.8 40.8 (80.3) (56.4) (61.6) (3.4) 26.9 (118.1) 10.1 19.6 31.1
Prepaid expenses (1.0) 0.0 4.0 6.0 3.0 4.0 3.0 (2.0) (8.0) (1.0) (0.2) (11.2) 10.4 (4.0) (3.4) (3.4) (8.6) (3.0) (3.4) (5.1) (5.6)
Short-term debt 0.0 1.0 0.0 0.0 2.0 0.0 0.0 2.0 0.0 115.4 117.4 76.4 2.2 2.3 148.9 121.8 5.9 6.0 6.1 6.1
Accounts payable 0.0 109.0 12.0 33.0 155.0 (1.0) 9.0 56.0 25.0 35.2 125.2 (56.0) 45.1 53.3 40.8 60.4 34.6 38.3 52.7 57.8
Accrued liabilities 0.0 60.0 (23.0) 47.0 60.0 24.0 (30.0) (21.0) 45.0 4.6 (1.4) 5.3 17.8 21.0 12.6 25.5 10.8 17.0 20.3 22.2
Other working capital 53.0 (202.0) 17.0 (13.0) 0.0 0.0 0.0 37.0 (37.0) (1.6) (1.6) 0.0 (0.7) (0.8) (0.8) (5.5) 0.0 0.0 0.0 0.0
Other non-cash items (40.0) 12.0 8.0 6.0 (14.0) (83.0) 10.0 24.0 (23.0) 31.0 0.0 32.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net cash provided by operating activities 105.0 245.0 156.0 205.0 217.0 32.0 115.0 36.0 48.0 (6.0) 427.3 505.3 159.0 310.9 354.9 581.7 632.3 364.6 571.4 661.3 729.6
Cash Flows From Investing Activities
Investments in property, plant, and equipment (37.0) (40.0) (69.0) (70.0) (75.0) (17.0) (22.0) (18.0) (12.0) (35.0) (18.8) (83.8) (108.3) (125.5) (94.4) (156.8) (180.0) (230.9) (254.0) (279.4) (307.4)
Property, plant, and equipment reductions 0.0 0.0 0.0 0.0 1.0 1.0 (1.0) 1.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Acquisitions, net (844.0) 3.0 (30.0) (219.0) (35.0) (184.0) 1.0 (142.0) (860.0) (184.0) (1185.0) 0.0 (80.9) (87.6) (91.3) (621.3) 0.0 0.0 0.0 0.0
Purchases of investments (8.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Sales/Maturities of investments 3.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Purchases of intangibles (22.0) (9.0) (9.0) (6.0) (1.0) (3.0) (3.0) (2.0) (2.0) (9.4) (16.4) (36.1) (41.8) (47.2) (52.3) (60.0) (66.0) (72.6) (79.8) (87.8)
Other investing activities 0.0 1.0 (1.1) (0.1) 0.0 (0.5) (0.5) (0.5) (3.7) 0.0 0.0 0.0 0.0
Net cash used for investing activities (34.0) (906.0) (74.0) (109.0) (307.0) (51.0) (210.0) (20.0) (157.0) (897.0) (213.3) (1284) (144.3) (248.6) (229.7) (300.9) (865.0) (296.9) (326.6) (359.3) (395.2)
Cash Flows From Financing Activities
Debt issued 912.0 263.0 321.0 517.0 286.0 120.0 425.0 742.0 587.0 82.0 1836.0 0.0 36.0 39.0 40.6 276.8 0.0 0.0 0.0 0.0
Debt repayment (74.0) (339.0) (341.0) (325.0) (477.0) (190.0) (90.0) (165.0) (529.0) (445.0) 0.0 (1139.0) 0.0 (109.5) (122.6) (300.2) 0.0 0.0 (184.5) (254.6) (336.1)
Common stock issued 111.0 16.0 12.0 376.0 8.1 412.1 30.3 36.8 44.6 55.0 69.6 87.0 107.6 133.4 165.5
Excess tax benefit from stock based compensation 0.0 6.0 4.0 3.0 4.0 3.0 1.0 5.0 4.0 3.0 3.5 15.5 2.7 (0.4) (0.4) (0.8) (1.6) (0.1) (0.5) (0.8) (0.9)
Common Dividends 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (86.6) (99.6) (113.3) (120.8) (142.0) (161.0) (182.5) (207.0)
Other financing activities 5.0 (27.0) (10.0) (4.0) 1.0 (1.0) 3.0 (310.0) (110.0) 765.0 1.9 346.9 0.0 0.8 0.9 0.9 6.4 0.0 0.0 0.0 0.0
Net cash provided by (used for) financing activities (70.0) 663.0 (84.0) (6.0) 46.0 97.0 34.0 (46.0) 107.0 911.0 95.5 1471.5 33.0 (122.9) (138.1) (317.7) 230.4 (55.2) (238.4) (304.5) (378.4)
Effect of exchange rate changes 1.0 1.0 (1.0) 2.0 (3.0) 2.0 0.0 (1.0) 3.0 (2.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net change in cash 2.0 2.0 (3.0) 91.0 (48.0) 80.0 (62.0) (31.0) 1.0 5.0 309.5 692 47.7 (60.6) (12.9) (36.9) (2.4) 12.5 6.3 (2.5) (44.0)
Cash at beginning of period 3.0 4.0 6.0 3.0 94.0 28.0 108.0 46.0 16.0 17.0 22.0 46.0 738.5 786.2 725.5 712.6 675.7 673.3 685.7 692.0 689.5
Cash at end of period 4.0 6.0 3.0 94.0 46.0 108.0 46.0 16.0 17.0 22.0 331.5 738.5 786.2 725.5 712.6 675.7 673.3 685.7 692.0 689.5 645.5
1
Free Cash Flow
Operating cash flow 105.0 245.0 156.0 205.0 217.0 32.0 115.0 36.0 48.0 (6.0) 427.3 505.3 159.0 310.9 354.9 581.7 632.3 364.6 571.4 661.3 729.6
Capital expenditure (37.0) (62.0) (78.0) (80.0) (81.0) (17.0) (25.0) (22.0) (14.0) (37.0) (28.2) (100.2) (144.3) (167.3) (141.6) (209.1) (239.9) (296.9) (326.6) (359.3) (395.2)
Free cash flow 68.0 183.0 78.0 125.0 136.0 15.0 90.0 14.0 33.0 (44.0) 399.1 405.1 14.7 143.6 213.3 372.6 392.3 67.6 244.7 302.0 334.4
Free Cash Flows Free Cash Flows
Historic Projections
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
EBIAT 100.00$ 138.00$ 148.00$ 140.00$ 136.00$ 135.17$ 262.03$ 296.90$ 325.56$ 347.91$ 407.91$ 460.97$ 499.95$ 541.85$ 587.66$
Depreciation & Amortization 47.0 70.0 83.0 98.0 109.0 121.2 72.2 83.6 94.4 104.5 120.0 118.8 130.6 143.7 158.1
Current Asset Adjustments
Receivables (40.0) 12.0 (10.0) (28.0) (50.2) 39.7 37.0 24.0 24.3 (35.0) 12.0 14.8 18.0 0.0
Inventories (22.0) (42.0) (18.0) (59.0) (155.8) (80.3) (72.1) (78.5) (21.1) (93.3) (118.1) 10.1 19.6 31.1
Deferred income taxes 0.0 (1.0) (4.0) (14.0) 1.5 0.7 (3.7) (4.1) (4.5) (6.1) (1.7) (3.8) (4.6) (5.1)
Prepaid expenses (6.0) 0.0 13.0 (14.0) (19.9) 10.4 (4.8) (4.2) (4.2) (14.2) (3.0) (3.4) (5.1) (5.6)
Other current assets 0.0 0.0 (10.0) 14.0 (1.6) 0.0 (0.7) (0.8) (0.8) (5.5) 0.0 0.0 0.0 0.0
Total Current Asset Adjustment (70.0) (27.0) (120.0) (62.0) (226.0) (29.4) (44.2) (63.6) (6.4) (154.1) (110.8) 17.7 27.9 20.3
Current Liability Adjustments
Short-term debt 0.0 1.0 0.0 0.0 117.6 76.4 2.3 2.4 149.0 122.5 5.9 6.0 6.1 6.1
Accounts payable 0.0 109.0 12.0 33.0 138.0 (56.0) 50.7 59.5 47.2 103.7 34.6 38.3 52.7 57.8
Accrued liabilities 0.0 60.0 (23.0) 47.0 2.7 5.3 19.6 23.0 14.7 39.4 10.8 17.0 20.3 22.2
Other current liabilities 53.0 (202.0) 27.0 (27.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Current Liability Adjustment 53.0 (32.0) 16.0 53.0 258.4 25.7 72.5 84.8 210.9 265.7 51.3 61.2 79.1 86.2
Capital Expenditures 37.0 40.0 69.0 70.0 83.8 108.3 125.5 94.4 156.8 180.0 230.9 254.0 279.4 307.4
Unlevered Free Cash Flow 154.0$ 132.0$ 65.0$ 166.0$ 205$ 222.2$ 283.4$ 346.7$ 500.1$ 459.5$ 289.3$ 455.5$ 513.2$ 544.9$
WACC 10.00%
Discount Period Accounting Period Ends: 12 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 9.000 10.000
Discount Factor 0.91 0.83 0.75 0.68 0.62 0.56 0.51 0.47 0.42 0.39
Present Value of Free Cash Flow 154.0$ 132.0$ 65.0$ 166.0$ 186.4$ 183.6$ 212.9$ 236.8$ 310.5$ 259.4$ 148.4$ 212.5$ 217.6$ 210.1$
Discounted Cash Flows HEIBAAS Valuation
2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
AA Rate BETA WACC
0.91 0% 9% 74.7 83.8 87.3 89.5 93.9 93.4 88.0 85.2 82.6 79.8
0.91 0% 10% 74.7 83.3 86.3 88.0 91.8 91.0 85.4 82.4 79.6 76.7
0.91 0% 11% 74.7 82.7 85.2 86.5 89.8 88.6 83.0 79.8 76.8 73.7
0.91 9% 9% 67.8 76.0 79.2 81.2 85.1 84.7 79.8 77.3 74.9 72.4
0.91 9% 10% 67.8 75.5 78.2 79.8 83.2 82.5 77.5 74.8 72.2 69.5
0.91 9% 11% 67.8 75.0 77.3 78.5 81.4 80.4 75.3 72.4 69.7 66.9
0.91 11% 9% 66.7 74.9 78.0 79.9 83.8 83.4 78.6 76.1 73.7 71.3
0.91 11% 10% 66.7 74.4 77.0 78.6 82.0 81.2 76.3 73.6 71.1 68.5
0.91 11% 11% 66.7 73.9 76.1 77.2 80.2 79.1 74.1 71.3 68.6 65.8
0.95 0% 9% 78.4 88.0 91.7 94.0 98.5 98.1 92.4 89.5 86.7 83.8
0.95 0% 10% 78.4 87.4 90.6 92.4 96.4 95.5 89.7 86.6 83.6 80.5
0.95 0% 11% 78.4 86.9 89.5 90.8 94.2 93.0 87.1 83.8 80.6 77.4
0.95 9% 9% 71.1 79.8 83.2 85.2 89.4 89.0 83.8 81.2 78.6 76.0
0.95 9% 10% 71.1 79.3 82.2 83.8 87.4 86.6 81.4 78.5 75.8 73.0
0.95 9% 11% 71.1 78.8 81.2 82.4 85.5 84.4 79.0 76.0 73.1 70.2
0.95 11% 9% 70.1 78.6 81.9 83.9 88.0 87.6 82.5 79.9 77.4 74.8
0.95 11% 10% 70.1 78.1 80.9 82.5 86.0 85.3 80.1 77.3 74.6 71.9
0.95 11% 11% 70.1 77.6 79.9 81.1 84.2 83.1 77.8 74.8 72.0 69.1
1.04 0% 9% 85.9 96.4 100.4 102.9 107.9 107.4 101.2 98.0 95.0 91.8
1.04 0% 10% 85.9 95.8 99.2 101.2 105.5 104.6 98.3 94.8 91.5 88.2
1.04 0% 11% 85.9 95.1 98.0 99.5 103.2 101.9 95.4 91.8 88.3 84.8
1.04 9% 9% 77.9 87.4 91.1 93.3 97.9 97.4 91.8 88.9 86.1 83.2
1.04 9% 10% 77.9 86.9 90.0 91.8 95.7 94.9 89.1 86.0 83.0 80.0
1.04 9% 11% 77.9 86.3 88.9 90.2 93.6 92.4 86.6 83.2 80.1 76.9
1.04 11% 9% 76.7 86.1 89.7 91.9 96.4 95.9 90.4 87.5 84.8 81.9
1.04 11% 10% 76.7 85.5 88.6 90.3 94.2 93.4 87.7 84.7 81.8 78.7
1.04 11% 11% 76.7 85.0 87.5 88.8 92.2 91.0 85.2 82.0 78.9 75.7
Target Range 52-Week 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
High 94.52$ 86.95$ 85.91$ 96.41$ 100.41$ 102.91$ 107.93$ 107.44$ 101.20$ 97.99$ 94.96$ 91.75$
Range 23.17$ 24.19$ 19.20$ 22.54$ 24.28$ 25.66$ 27.78$ 28.32$ 27.08$ 26.73$ 26.37$ 25.91$
Low 71.34$ 62.76$ 66.72$ 73.87$ 76.12$ 77.25$ 80.16$ 79.12$ 74.12$ 71.27$ 68.59$ 65.85$
Target
Range
Choke
Point
Momentum
Loss
Fibonacci 181
Fibonacci 100
Fibonacci 281
B&G Foods Operating Model
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenue 1,512.0 1,817.0 2,050.0 2,182.0 2,294.0 3,109.9 4,711.8 6,360.9 7,315.0 8,192.8 9,176.0
Cost of revenue 1,185.0 1,386.0 1,577.0 1,728.0 1,818.0 2,446.9 3,675.2 4,961.5 5,705.7 6,390.4 7,157.2
Gross profit 326.0 431.0 473.0 454.0 476.0 663.0 1,036.6 1,399.4 1,609.3 1,802.4 2,018.7
Operating expenses
Sales, General, & Administrative 131.0 151.0 156.0 143.0 158.0 353.7 471.2 636.1 731.5 819.3 917.6
Restructuring, merger and acquisition 6.0
Other operating expenses 7.0 28.0 41.0 37.0 35.0 57.0 80.0 80.0 80.0 80.0 80.0
Total operating expenses 138.0 179.0 197.0 180.0 193.0 411.7 551.2 716.1 811.5 899.3 997.6
EBITDA 188.0 252.0 276.0 274.0 283.0 305.3 485.4 683.3 797.8 903.1 1,021.1
Depreciation & Amortization 47.0 70.0 83.0 98.0 109.0 115.0 141.4 190.8 219.5 245.8 275.3
Operating income 131.0 177.0 188.0 177.0 178.0 219.3 344.1 492.5 578.4 657.4 745.8
Other income (expense) 10.0 6.0 5.0 (1.0) (4.0) (33.0) (20.0) (20.0) (20.0) (20.0) (20.0)
EBIT 141.0 183.0 193.0 176.0 174.0 186.3 324.1 472.5 558.4 637.4 725.8
Interest Expense 18.0 46.0 53.0 52.0 49.0 78.6 194.4 194.4 194.4 194.4 194.4
Income before taxes 122.0 136.0 140.0 124.0 125.0 107.7 129.7 278.1 363.9 442.9 531.4
Provision for income taxes 41.0 45.0 45.0 36.0 38.0 36.9 45.4 97.3 127.4 155.0 186.0
Net income 81.0 91.0 94.0 88.0 87.0 70.8 84.3 180.7 236.6 287.9 345.4
Shares Outstanding
Basic 32.0 35.0 36.0 36.0 36.0 59.9 59.9 59.9 59.9 59.9 59.9
Diluted 33.0 36.0 37.0 37.0 37.0 60.9 60.9 60.9 60.9 60.9 60.9
Earnings per Share
Basic 2.53$ 2.60$ 2.61$ 2.44$ 2.42$ 1.18$ 1.41$ 3.02$ 3.95$ 4.81$ 5.77$
Diluted 2.45$ 2.53$ 2.54$ 2.38$ 2.35$ 1.16$ 1.38$ 2.97$ 3.89$ 4.73$ 5.67$
B&G Foods Balance Sheet Consolidation
BGS THS PF
2014-09 2014-09 ADD LESS 2014-09E
Assets
Current assets
Cash
Cash and cash equivalents 6 22 28
Short-term investments 9 9
Total cash 6 31 0 0 37
Receivables 68 225 293
Inventories 133 677 810
Deferred income taxes 4 9 4 9
Prepaid expenses 8 32 40
Other current assets 13 0 13
Total current assets 232 974 0 4 1202
Non-current assets
Property, plant and equipment
Gross property, plant and equipment 240 904 1144
Accumulated Depreciation -125 -364 -489
Net property, plant and equipment 115 540 0 0 655
Goodwill 370 1674 1729.75 370 3403.75
Intangible assets 951 738 1689
Other long-term assets 30 21 51
Total non-current assets 1466 2972 1729.75 370 5798.75
Total assets 1698 3947 1729.75 374 7000.75
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt 21 4 25
Accounts payable 50 244 294
Accrued liabilities 28 78 106
Other current liabilities 18 0 18
Total current liabilities 116 327 0 0 443
Non-current liabilities
Long-term debt 1025 1559 482.5125 3066.513
Deferred taxes liabilities 201 307 201 307
Other long-term liabilities 2 36 38
Total non-current liabilities 1229 1901 482.5125 201 3411.513
Total liabilities 1345 2228 482.5125 201 3854.513
Stockholders' equity
Common stock 1 0 1 0
Additional paid-in capital 128 1153 1447.538 128 2600.538
Retained earnings 227 612 246.3005 592.6995
Accumulated other comprehensive income -2 -47 2 -47
Total stockholders' equity 353 1719 1449.538 375.3005 3146.237
Total liabilities and stockholders' equity 1698 3947 1932.05 576.3005 7000.75
J&J Snack Foods PF Corp Operating Model
2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Revenue 3,972.9 4,494.9 5,058.7 5,707.4 6,496.2 7,509.4 8,529.5 9,695.7 11,043.4 12,602.1
Cost of revenue 3,033.1 3,400.0 3,845.2 4,351.6 4,948.0 5,713.3 6,484.9 7,379.1 8,406.9 9,590.5
Gross profit 939.8 1,094.9 1,213.5 1,355.8 1,548.2 1,796.1 2,044.6 2,316.6 2,636.5 3,011.6
Operating expenses
Sales, General and administrative 480.1 500.1 553.8 623.5 718.8 843.3 943.2 1,070.9 1,221.9 1,397.9
1.4
Other operating expenses 52.0 4.5 5.1 5.7 6.5 7.5 8.5 9.7 11.0 12.6
Total operating expenses 533.5 504.5 558.9 629.3 725.3 850.8 951.8 1,080.6 1,233.0 1,410.5
EBITDA 427.4 590.4 654.7 726.5 822.8 945.3 1,092.8 1,236.0 1,403.5 1,601.1
Depreciation & Amortization 164.0 192.1 218.8 247.3 281.7 321.4 367.6 418.5 476.5 543.3
Operating income 292.3 398.2 435.8 479.3 541.2 624.0 725.2 817.4 927.0 1,057.8
Other income (expense) -25.3 0.7 -1.9 -7.9 -10.8 -14.5 -8.9 -12.4 -16.1 -18.5
EBIT 267.1 398.9 433.9 471.4 530.4 609.5 716.4 805.1 910.9 1,039.2
Interest Expense 43.7 106.7 106.7 106.7 106.7 106.7 106.7 106.7 106.7 106.7
Income before taxes 223.4 292.2 327.2 364.7 423.7 502.8 609.7 698.4 804.2 932.5
Provision for income taxes 78.5 98.4 109.3 122.1 142.8 170.3 205.0 234.7 270.7 314.2
Net income 145.8 193.8 217.9 242.6 281.0 332.5 404.7 463.6 533.5 618.3
Earnings per share
Basic 2.31$ 3.06$ 3.45$ 3.84$ 4.44$ 5.26$ 6.40$ 7.33$ 8.44$ 9.78$
Diluted -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Weighted average shares outstanding
Basic 63 63 63 63 63 63 63 63 63 63
Diluted 64 64 64 64 64 64 64 64 64 64
J&J Snack Foods Balance Sheet Consolidation
JJSF THS PF
2014-06 2014-09 ADD LESS 2009-12
Assets
Current assets
Cash
Cash and cash equivalents 68 22 90
Short-term investments 9 9
Total cash 68 31 0 0 99
Receivables 109 225 334
Inventories 80 677 757
Deferred income taxes 5 9 5 9
Prepaid expenses 4 32 36
Total current assets 266 974 0 5 1235
Non-current assets
Property, plant and equipment
Gross property, plant and equipment 535 904 1439
Accumulated Depreciation -376 -364 -740
Net property, plant and equipment 159 540 0 0 699
Equity and other investments 132 132
Goodwill 86 1674 1771 86 3445
Intangible assets 52 738 790
Other long-term assets 4 21 25
Total non-current assets 433 2972 1771 86 5091
Total assets 698 3947 1771 91 6326
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt 4 4
Capital leases 0 0
Accounts payable 67 244 311
Taxes payable 2 2 0
Accrued liabilities 29 78 107
Other current liabilities 6 6
Total current liabilities 104 327 0 2 428
Non-current liabilities
Long-term debt 1559 575 2134
Capital leases 0 0
Deferred taxes liabilities 46 307 46 307
Other long-term liabilities 1 36 37
Total non-current liabilities 47 1901 575 46 2478
Total liabilities 151 2228 575 48 2906
Stockholders' equity
Additional paid-in capital 31 1153 1725 31 2878
Retained earnings 520 612 543 589
Accumulated other comprehensive income -4 -47 4 -47
Total stockholders' equity 548 1719 1729 574 3420
Total liabilities and stockholders' equity 698 3947 2304 622 6326
J&J Snack Foods Synergies
THS 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Without Synergies
Revenue 2,982.2 3,608.5 4,182.1 4,719.0 5,227.3 5,998.6 6,598.5 7,258.3 7,984.2 8,782.6
SGA 279.2 283.4 327.2 367.8 408.2 475.0 517.7 569.4 626.5 689.7
Tax 45.0 83.1 100.6 115.3 131.0 141.0 165.0 187.0 211.9 240.4
With Synergies
Revenue 2,982.2 3,608.5 4,061.1 4,581.9 5,215.1 6,028.5 6,847.4 7,783.6 8,865.5 10,116.9
SGA 360.4 401.4 444.6 500.6 577.1 677.0 757.2 859.7 981.0 1,122.2
Tax 59.0 79.0 87.7 98.0 114.6 136.8 164.6 188.4 217.3 252.2
Net Synergies (95.1) (113.9) (225.5) (252.5) (164.8) (167.9) 9.8 233.6 521.5 890.0
JJSF 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Without Synergies
Revenue 957.2 1,033.6 1,118.6 1,214.0 1,309.8 1,422.2 1,539.4 1,667.0 1,805.5 1,954.7
SGA 209.6 213.1 228.3 247.4 268.3 295.3 316.1 342.0 370.8 402.0
Tax 38.6 17.5 17.0 16.7 15.3 12.4 20.4 20.9 21.7 22.8
With Synergies
Revenue 957.2 1,082.9 1,218.8 1,375.1 1,565.1 1,809.2 2,055.0 2,335.9 2,660.6 3,036.2
SGA 115.7 120.5 133.4 150.2 173.2 203.2 227.2 258.0 294.4 336.8
Tax 18.9 23.7 26.3 29.4 34.4 41.0 49.4 56.6 65.2 75.7
Net Synergies 113.6 135.8 185.8 245.6 331.4 450.5 575.5 717.2 887.9 1,093.8
J&J Snack Foods
Free Cash Flows
PF Corp 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
EBIAT 189.5 300.5 324.6 349.3 387.7 439.2 511.4 570.3 640.2 725.0
D&A 164.0 192.1 218.8 247.3 281.7 321.4 367.6 418.5 476.5 543.3
LESS: Capex 109.1 118.2 128.1 138.7 150.3 162.8 176.4 191.1 207.0 224.2
LESS: dNWC 39.8 45.1 50.7 57.2 65.1 75.3 85.5 97.2 110.7 126.4
LESS: Interest Expense 43.7 106.7 106.7 106.7 106.7 106.7 106.7 106.7 106.7 106.7
Free Cash Flows 160.9 222.7 258.0 293.9 347.2 415.7 510.4 593.9 692.3 811.0
Present Value of FCF $146.25 $184.01 $193.81 $200.73 $215.58 $234.65 $261.89 $277.04 $293.61 $312.69
Realizable Synergies 1 2 3 4 5 6 7 8 9 10
PF Corp 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Total 18.5 21.9 (39.7) (6.9) 166.7 282.7 585.3 950.8 1,409.5 1,983.7
PV of Synergies 16.8 18.1 (29.8) (4.7) 103.5 159.6 300.3 443.6 597.8 764.8
5 Years
Cumulative PV of Synergies 103.9
Per Share
Basic 1.64$
Diluted 1.62$
Leverage Buyout Sources & Allocation of Capital
% of MRFY P/
Rate Balance Total EBITDA
Cash 0% 22.0 0.43% 0.08
Revolver 6% 10% 493.2 9.57% 1.74
Senior Debt 6% 30% 1,545.6 30.00% 5.46
Sub Debt 12% 20% 1,030.4 20.00% 3.64
Mezzanine 12% 10% 515.2 10.00% 1.82
Sponsor Equity 10% 30% 1,545.6 30.00% 5.46
Total sources 100.0% 5,152.0 100.00% 18.20
Equity purchase price 3,500.0 67.93% 12.37
Refinance debt 1,528.0 29.66% 5.40
Fund cash balance 71.5 1.39% 0.25
Transaction costs 1.5% 52.5 1.02% 0.19
Total uses 5,152.0 100.00% 18.20
Close Details
Price 82.50$
Date of Close 12/31/2014
MRFY EBITDA 283.00
Exit Year 5
Assumptions
Base Year 2014
Sponsor Target IRR 25.00%
Exit Mulitple 5.0x
Tax Rate 33.92%
Net Debt $1,528
Ownership at Exit 10%
Leverage Buyout Debt Schedule
1 Rate 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Revolver 6.0%
BB $493 $327 $430 $416 $460 $384 $274 $232 $288 $80
Mandatory Paydown Yes (166) 103 (14) 44 (77) (110) (42) 56 (207) (7)
Optional Paydown 0.00% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
EB $493 $327 $430 $416 $460 $384 $274 $232 $288 $80 $74
Interest Expense 25 23 25 26 25 20 15 16 11 5
Senior Debt 6.0%
BB $1,546 $1,712 $1,712 $1,712 $1,712 $1,712 $1,712 $1,712 $1,712 $1,712
Mandatory Paydown Yes 166 0 0 0 0 0 0 0 0 0
Optional Paydown 0.00% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
EB $1,546 $1,712 $1,712 $1,712 $1,712 $1,712 $1,712 $1,712 $1,712 $1,712 $1,712
Interest Expense 98 103 103 103 103 103 103 103 103 103
Sub Debt 12.0%
BB $1,030 $1,030 $1,030 $1,030 $1,030 $1,030 $1,030 $1,030 $1,030 $1,030
Mandatory Paydown Yes 0 0 0 0 0 0 0 0 0 0
Optional Paydown 0.00% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
EB $1,030 $1,030 $1,030 $1,030 $1,030 $1,030 $1,030 $1,030 $1,030 $1,030 $1,030
Interest Expense 124 124 124 124 124 124 124 124 124 124
Mezzanine 12.0%
BB $515 $515 $515 $515 $515 $515 $515 $515 $515 $515
Mandatory Paydown Yes 0 0 0 0 0 0 0 0 0 0
Optional Paydown 0.00% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
EB $515 $515 $515 $515 $515 $515 $515 $515 $515 $515 $515
Interest Expense 62 62 62 62 62 62 62 62 62 62
Net Debt $3,584 $3,584 $3,687 $3,673 $3,717 $3,641 $3,531 $3,489 $3,545 $3,338 $3,331
Total Interest Expense $308 $311 $314 $314 $313 $308 $303 $304 $299 $293
Leverage Buyout Free Cash Flows 1 2 3 4 5 6 7 8 9 10
Historic Projections
2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
EBIAT 100.00$ 138.00$ 148.00$ 140.00$ 136.00$ 135.17$ 262.03$ 296.90$ 325.56$ 347.91$ 407.91$ 460.97$ 499.95$ 541.85$ 587.66$
Depreciation & Amortization 47.0 70.0 83.0 98.0 109.0 121.2 72.2 83.6 94.4 104.5 120.0 118.8 130.6 143.7 158.1
Current Asset Adjustments
Total Current Asset Adjustment (70.0) (27.0) (120.0) (62.0) (226.0) (29.4) (44.2) (63.6) (6.4) (154.1) (110.8) 17.7 27.9 20.3
Total Current Liability Adjustment 53.0 (32.0) 16.0 53.0 258.4 25.7 72.5 84.8 210.9 265.7 51.3 61.2 79.1 86.2
Net Working Capital Adjustment (17.0) (59.0) (104.0) (9.0) 32.4 (3.8) 28.3 21.2 204.5 111.6 (59.5) 78.9 107.1 106.5
Capital Expenditures 37.0 40.0 69.0 70.0 83.8 108.3 125.5 94.4 156.8 180.0 230.9 254.0 279.4 307.4
Interest Payment 307.8 310.9 313.5 314.5 313.5 307.9 303.3 303.8 299.2 292.8
Debt Paydown 0.0 102.8 (14.1) 44.2 (76.5) (110.1) (41.5) 55.6 (207.3) (6.7)
Unlevered Free Cash Flow 154.0$ 132.0$ 65.0$ 166.0$ (102.8)$ 14.1$ (44.2)$ 76.5$ 110.1$ 41.5$ (55.6)$ 207.3$ 6.7$ 245.4$
WACC 10.00%
Discount Period Accounting Period Ends: 12 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 9.000 10.000
Discount Factor 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Present Value of Free Cash Flow 154.0$ 132.0$ 65.0$ 166.0$ (102.8)$ 14.1$ (44.2)$ 76.5$ 110.1$ 41.5$ (55.6)$ 207.3$ 6.7$ 245.4$
Implied Share Price
Terminal EBITDA 696.17$
Exit Multiple 5.0x
Enterprise Value 3,500.0
Less: Net Debt 1,528.0
Equity Value 5,028.0
Sponsor Ownership at Exit 90.0%
Sponsor Equity Value at Exit 4,525.2
Sponsor Expected IRR 25.0%
Sponsor Equity at Closing 1,482.8
Net Debt at Closing 1,528.0
Implied EV at Closing 3,010.8$
PV of FCF 198
Termial Value 3,208.8
Diluted Shares Outstanding 42
Implied Share Price 75.80$