valuation case. needed in 6 hours. need proof of similar projects.
Budget: $30 – $250 USD
company A., a private comfort food US company is looking to
acquire Company B, a US snack food company. The following data is
available for Company B:
Forecasted (F) and Actual (A) Statement of Income
2019 (A) 2020 (A) 2021 (F)
Sales $98.6 $122.2 $150.1
Cost of Sales 72.0 90.6 114.8
Gross Profit $26.6 $31.6 $ 35.3
SG&A 12.9 14.1 16.3
EBITDA 13.7 17.5 19.0
D&A 1.1 1.2 1.2
Net Income $12.6 $16.3 $17.8
company B is a leading producer of nuts and related organic comfort foods.
Its primary markets are the US and Europe. company B sells 50% percent of
their products to the consumer using their own brands and 50% to other
companies on a private label basis.
Required: Calculate the value of the Gencor using the following methods (a
and b):
a. Comparable multiples (p/s and p/e).* The most important aspect of (a)
is the selection of inputs and the associated documentation, discussion
and motivation why certain companies and numbers were selected.
b. Discounted Cash Flow Analysis, which must include the acquisition
premium method. As in (a), document your selections. Use EBITDA for
your cash flow estimations. The forecast must be for 5 years. Then
assume an appropriate terminal value. Document your assumptions.
c. Compare the computed values and comment in detail on the firms’
performance and valuation as related to your selection of comparables.
Also use the PEG Ratio, in addition to the previously calculated
valuation metrics.
d. You must discuss your selection of inputs that you use in the models.
This is a very important part of the assignment.
Again, be sure to state any assumptions you make. Also make sure you
discuss and support why you picked certain numbers and companies. As
stated earlier, this is an important aspect of this problem. If needed, use a
discount rate of 12 percent. If needed, the tax rate = 25%.
Use only the comparable firms on this page. Useful sources include:
https://www.investopedia.com/articles/analyst/043002.asp
www.marketwatch.com.
www.gurufocus.com
www.simplywall.st
www.finance.yahoo.com.
Deliverables: A report (including title page listing all team members and an
executive summary) not exceeding 6 pages (body and appendix).
Calculations should not exceed two pages (in the appendix using Excel) and
be incorporated by reference in the body of the paper.
more information:
Industry Information:
PE Ratio 16x
Net Income Annual
Growth Rate
8.8% per
year
Industry PEG Ratio 1.09x
Market PEG Ratio 1.3x
Chips Limited PEG
Ratio .8x
Acquisition Premiums:
DV Snacks (USD) 35%
Canadian Control (CDN) 25%
RP Snacks (Taiwan) 55%
Yellowknife Snacks (CDN) 12%
Potential Competitors:
Hostess Brands, Inc.
Hormel Foods Corp.
Hain Celestial Group
John B. Sanfilippo
Seneca Foods Corp.
Natural Alternatives
J&J Snack Foods
TreeHouse Foods, Inc.
Nomad Foods Limited
Post Holdings, Inc.
Flowers Foods, Inc.
United Natural Foods, Inc
Note: you must select from
these comparable/
competitor companies. Not
all of the above firms are
relevant as comparables.
acquire Company B, a US snack food company. The following data is
available for Company B:
Forecasted (F) and Actual (A) Statement of Income
2019 (A) 2020 (A) 2021 (F)
Sales $98.6 $122.2 $150.1
Cost of Sales 72.0 90.6 114.8
Gross Profit $26.6 $31.6 $ 35.3
SG&A 12.9 14.1 16.3
EBITDA 13.7 17.5 19.0
D&A 1.1 1.2 1.2
Net Income $12.6 $16.3 $17.8
company B is a leading producer of nuts and related organic comfort foods.
Its primary markets are the US and Europe. company B sells 50% percent of
their products to the consumer using their own brands and 50% to other
companies on a private label basis.
Required: Calculate the value of the Gencor using the following methods (a
and b):
a. Comparable multiples (p/s and p/e).* The most important aspect of (a)
is the selection of inputs and the associated documentation, discussion
and motivation why certain companies and numbers were selected.
b. Discounted Cash Flow Analysis, which must include the acquisition
premium method. As in (a), document your selections. Use EBITDA for
your cash flow estimations. The forecast must be for 5 years. Then
assume an appropriate terminal value. Document your assumptions.
c. Compare the computed values and comment in detail on the firms’
performance and valuation as related to your selection of comparables.
Also use the PEG Ratio, in addition to the previously calculated
valuation metrics.
d. You must discuss your selection of inputs that you use in the models.
This is a very important part of the assignment.
Again, be sure to state any assumptions you make. Also make sure you
discuss and support why you picked certain numbers and companies. As
stated earlier, this is an important aspect of this problem. If needed, use a
discount rate of 12 percent. If needed, the tax rate = 25%.
Use only the comparable firms on this page. Useful sources include:
https://www.investopedia.com/articles/analyst/043002.asp
www.marketwatch.com.
www.gurufocus.com
www.simplywall.st
www.finance.yahoo.com.
Deliverables: A report (including title page listing all team members and an
executive summary) not exceeding 6 pages (body and appendix).
Calculations should not exceed two pages (in the appendix using Excel) and
be incorporated by reference in the body of the paper.
more information:
Industry Information:
PE Ratio 16x
Net Income Annual
Growth Rate
8.8% per
year
Industry PEG Ratio 1.09x
Market PEG Ratio 1.3x
Chips Limited PEG
Ratio .8x
Acquisition Premiums:
DV Snacks (USD) 35%
Canadian Control (CDN) 25%
RP Snacks (Taiwan) 55%
Yellowknife Snacks (CDN) 12%
Potential Competitors:
Hostess Brands, Inc.
Hormel Foods Corp.
Hain Celestial Group
John B. Sanfilippo
Seneca Foods Corp.
Natural Alternatives
J&J Snack Foods
TreeHouse Foods, Inc.
Nomad Foods Limited
Post Holdings, Inc.
Flowers Foods, Inc.
United Natural Foods, Inc
Note: you must select from
these comparable/
competitor companies. Not
all of the above firms are
relevant as comparables.