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: Auto components
In Feb-01 Heartland Industrial Partners (‘Heartland’) purchased 27m shares of the common stock of U.S. Collins & Aikman Corp. (‘Collins & Aikman’) for US$135m from The Blackstone Group and Wasserstein Perella Partners (reducing their holding by half). At the same time it purchased 25m newly issued shares of common stock from the company itself. This US$260m aggregate investment gave Heartland a stake of approximately 59.7% in the common stock of Collins & Aikman. This transaction valued the common equity at US$435m. Including US$742m in pro forma (net of US$125m equity issue) net debt at 31-Dec-00 the enterprise value of the transaction amounted to US$1.18bn. This implied the following multiples: 62% of sales for 2000 (US$1.9bn, 3.5x net tangible capital turn), 6.7x EBITDA for 2000 (US$175m, 9.2% margin), and 10.3x EBITA for 2000 (US$115m, 6.1% margin), and 2.2x net tangible capital employed (US$536m).
As a sidenote we would like to point out that Heartland Industrial Partners was founded by David A. Stockman, a former senior managing director at The Blackstone Group. There Mr Stockman was responsible for investments in industrial companies, including Collins & Aikman Corp, Bar Technologies, Inc., American Axle & Manufacturing, Inc, Clark USA, Inc. (now Premcor), Haynes International, Inc., Haynes Holdings, Inc., Imperial Home Decor Group Inc., Republic Engineered Steels, Inc., and RES Holding Corporation.
Filed under: Containers & Packaging
In Feb-04 Warburg Pincus bought the majority stake in the Irish packaging company Clondalkin Group Plc held by Candover. Acording to Clondalkin the deal valued the company at €630m although no further details were disclosed. This would imply the following mutliples: 89% of sales for 2002 (€710m), 6.7x EBITDA for 2002 (€93.8m. 13.2% margin). No details available on 2003 results.
In Nov-99 Candover had acquired the Irish packaging company Clondalkin Group Plc in a tender offer that valued the group at €542m (including €157m in assumed debt). This valuation implied the following multiples: 90% of sales for 1999E (€600m), 7.2x EBITDA for 1999E (€75m, 12.5% margin). In the Candover received acceptances of 85.8% of the issued ordinary share capital of Condalkin. The transaction was financed with €420m in debt (total debt 5.6x EBITDA) and €122m in equity from Candover (78/22 debt to equity).
Filed under: Construction & Engineering
In Aug-03 Berkshire Hathway paid US$12.50 per common share in a public tender offer for Clayton Homes’ ordinary shares. With 136.7m common shares outstanding this implies a valuation of US$1.7bn. Including US$429m assumed debt the total consideration amounted to US$2.13bn.This implied the following multiples: 177% of sales for 2002 (US$1.2bn, 0.7x tangible capital turn), 9.4x average pretax income over prior three years (US$182m, 15% margin).
Filed under: Electrical Equipment, Electronic Equipment & Instruments, Office Electronics
In Oct-96 Onex Corporation and affiliates acquired all of the outstanding shares of IBM’s canadian electronics manufacturing subsidiary Celestica International Inc. (‘Celestica’) for C$750m (US$540m). This implied the following multiples for the year ended 31-Dec-96: 27% of revenue (US$2,017m), 7.6x EBITA (US$70.6m, 3.5% margin). The acquisition was financed with US$325m in debt and US$200m in equity from Onex Corporation and affiliates.
Celestica went on an acquisition rampage in the following years buying manufacturing operations from – among others – Hewlett-Packard Company, Lucent Technologies Inc., Silicon Graphics Inc, Fujitsu-ICL Systems Inc., the assets of the Enterprise Systems Group and the Microelectronics Division of IBM, Bull Electronics Inc., and NEC Corporation., Motorola Inc., Avaya Inc., and Corvis Corporation.
In aggregate Celestica spent approximately US$3,716m on acquisitions and asset purchases between Oct-96 and Dec-03. This was financed by a total of US$2,886m from share issues and approximately US$2,016m in cash provided by operations (leaving US$1,029bn in cash on the balance sheet on 31-Dec-03).
