In Feb-00 Berkshire Hathaway (‘Berkshire’) through its subsidiary acquired all of the outstanding of U.S. rental furniture provider Cort Business Services Corporation (‘Cort’) for US$28 per share or an aggregate of US$395m. Including US$83m in net debt the total consideration amounted to US$477m. This implied the following multiples: 114% of LTM revenue (US$347m, 2.1x net tangible capital turn), 3.9x LTM EBITDA (US$102m, 29.4% margin), 7.0x LTM EBITA (US$56m, 16.1% margin), and 7.9x LTM pre-tax profit (US$50m – before goodwill amortization -, 14.4% margin). Citicorp Venture Capital, Ltd (‘CVC’) owned approximately 44% of the outstanding shares.
Filed under: Commercial Services & Supplies
In Jan-95 Texas Pacific Group (‘TPG’) acquired approximately 11.71m shares of common stock (31% stake) in U.S. waste collection, landfill and recycling company Allied Waste Industries, Inc. (‘Allied Waste’) for US$50m valuing the equity at around US$175m (including US$15m in preferred stock). Including US$220m in net debt at 31-Dec-1994 the enterprise value of this transaction amounted to US$395m.
This implied the following multiples: 250% of revenues for 1994 (US$158m, 0.53x net tangible capital turn), 14.3x EBITDA for 1994 (US$28m – before US$2.1m in unusual items -, 17.5% margin), 30.4x EBITA for 1994 (US$13.0m – operating profit before US$2.1m in unusual items and US$2.2m in goodwill amortization -, 8.2% margin), and 1.3x net tangible capital employed
In May-97 TPG sold all of its Allied Waste shares to The Blackstone Group (‘Blackstone’) and Apollo Advisors for approximately US$112m. In addition the pair bought the 14.6m shares held by Laidlaw Inc. (part of the US$1.5bn (or 8.7x LTM EBITDA, 6.7x LTM EBITDA including projected synergies) total consideration paid to Laidlaw for all of its waste management business in Dec-96) for approximately US$146m to bring the combined stake to approximately 35% of the Allied Waste common stock valuing the common equity at approximately US$737m. Including US$ 1.18bn in net debt at 31-Mar-97 and US$9.9m in preferred stock this implied an enterprise value of the transaction of US$1.93bn.
This implied the following multiples: 257% of pro forma revenues for 1996 (US$750m – including acquired Laidlaw business, giving effect of sale of Canadian business to US Waste Services, Inc.-, 1.0x net tangible capital turn), and 2.5x net tangible capital employed. No pro forma data are available on EBITDA and EBITA. However using the net debt level at 31-Dec-97 of US$1.39bn we can judge the valuation on the basis of 1997 earnings: 7.1x EBITDA for 1997 (US$300m, 34.3% margin), 10.2x EBITA for 1997 (US$210m – before US$5m in acquisition related costs -, 24.0% margin).
