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Airthread Connections Case Work Sheet
Airthread Connections Case Work Sheet
AIRTHREAD ACQUISITION
Comparable Companies:
Universal Mobile
Neuberger Wireless
Agile Connections
Big Country Communications
Rocky Mountain Wireless
Average
Equity
Market Value
Net
Debt
Debt/
Value
Debt/
Equity
118,497
69,130
37%
58%
189,470
79,351
30%
42%
21,079
5,080
19%
24%
26,285
8,335
24%
32%
7,360
3,268
31%
44%
28.1%
40.1%
Debt/
Value
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
28.1%
35.0%
40.0%
45.0%
47.0%
50.0%
Debt/
Equity
0.0%
5.3%
11.1%
17.6%
25.0%
33.3%
39.1%
53.8%
66.7%
81.8%
88.7%
100.0%
Asset
Beta
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
0.82
Equity
Beta
0.82
0.86
0.91
0.96
1.02
1.09
1.13
1.25
1.36
1.48
1.54
1.63
Cost of
Equity
8.33%
8.54%
8.78%
9.05%
9.35%
9.69%
9.92%
10.52%
11.05%
11.66%
11.94%
12.41%
Equity
Beta
0.86
0.89
1.17
0.97
1.13
1.00
Asset
Beta
0.64
0.71
1.02
0.81
0.89
0.82
Assumptions:
Marginal Tax Rate
Debt Beta
40.0%
0.00
5.00%
4.25%
Cost of Debt
5.50%
Cost of
Debt
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
5.50%
WACC
8.33%
8.28%
8.23%
8.19%
8.14%
8.09%
8.06%
8.00%
7.95%
7.90%
7.88%
7.85%
Cost of Capital
5531.6
0
AIRTHREAD ACQUISITION
Operating Results:
Service Revenue
Plus: Equipment Sales
Plus: Synergy Related Business Revenue
Total Revenue
Less: System Operating Expenses
Plus: Backhaul Synergy Savings
Less: Cost of Equipment Sold
2008
4,194.3
314.8
0.0
4,509.1
838.9
0.0
755.5
2009
4,781.5
358.8
0.0
5,140.4
956.3
0.0
861.2
2010
5,379.2
403.7
0.0
5,782.9
1,075.8
0.0
968.9
8.33%
1,255.3
1,803.6
1,111.1
705.2
405.9
162.4
2,056.2
1,266.7
804.0
462.7
185.1
2,313.2
1,425.0
867.4
557.6
223.0
243.5
705.2
25.9
631.3
291.6
277.6
804.0
19.7
719.7
342.3
334.6
867.4
20.0
867.4
314.5
269.2
291.7
247.4
Operating Margins:
14.0%
14.0%
7.5%
7.5%
14.3%
14.0%
80.0%
80.0%
-140.0%
-140.0%
40.0%
40.0%
24.6%
24.6%
15.6%
15.6%
9.0%
9.0%
40.0%
40.0%
14.0%
14.0%
12.5%
7.5%
12.5%
80.0%
-140.0%
40.0%
24.6%
15.0%
9.6%
40.0%
15.0%
2011
5,917.2
444.1
0.0
6,361.2
1,183.4
0.0
1,065.8
2012
6,331.4
475.2
0.0
6,806.5
1,266.3
0.0
1,140.4
2,544.5
1,567.5
922.4
645.2
258.1
2,722.6
1,677.3
952.9
724.4
289.7
387.1
922.4
18.0
970.1
321.4
434.6
952.9
13.9
1,055.0
318.6
233.4
213.6
10.0%
7.5%
10.0%
80.0%
-140.0%
40.0%
24.6%
14.5%
10.1%
40.0%
15.3%
7.0%
7.5%
7.0%
80.0%
-140.0%
40.0%
24.6%
14.0%
10.6%
40.0%
15.5%
2007
2008
2009
2010
435.5
101.0
41.6
143.4
260.8
59.2
114.6
0
521.9
135.0
46.9
163.2
335.5
64.7
140.4
25.8
595.0
153.9
53.5
186.1
382.4
73.7
160.1
19.7
669.4
173.1
60.1
209.3
430.2
82.9
180.1
20.0
2011
2012
736.3
190.4
66.2
230.3
473.2
91.2
198.1
18.0
787.9
203.7
70.8
246.4
506.4
97.6
212.0
13.9
AIRTHREAD ACQUISITION
2008
199.5
40.0%
79.8
2009
183.1
40.0%
73.2
2010
165.8
40.0%
66.3
75.6
65.8
56.5
5.50%
284.8
2011
147.6
40.0%
59.0
2012
128.3
40.0%
51.3
47.7
39.3
AIRTHREAD ACQUISITION
Terminal Value With Lon-Term D/V of 28.1%
8.33%
1,255.3
2008
243.5
705.2
25.9
631.3
291.6
2009
277.6
804.0
19.7
719.7
342.3
269.2
291.7
284.8
1,540.1
2.9%
4,286.7
5,826.8
0.0
5,826.8
79.8
75.6
73.2
65.8
2010
334.6
867.4
20.0
867.4
314.5
2011
387.1
922.4
18.0
970.1
321.4
2012
434.6
952.9
13.9
1,055.0
318.6
247.4
233.4
213.6
66.3
56.5
59.0
47.7
51.3
39.3
6,316.3
AIRTHREAD ACQUISITION
2.9%
Growth Rate
AIRTHREAD ACQUISITION
Date:
1/31/2008
2/28/2008
3/31/2008
4/30/2008
5/31/2008
6/30/2008
Payment
41
41
41
41
41
41
41
Annual
Interest
5.5%
17
17
17
17
17
17
Principal
24
24
24
24
24
24
Balance
3,758
3,734
3,711
3,687
3,663
3,639
3,615
7/31/2008
8/31/2008
9/30/2008
10/31/2008
11/30/2008
12/31/2008
1/31/2009
2/28/2009
3/31/2009
4/30/2009
5/31/2009
6/30/2009
7/31/2009
8/31/2009
9/30/2009
10/31/2009
11/30/2009
12/31/2009
1/31/2010
2/28/2010
3/31/2010
4/30/2010
5/31/2010
6/30/2010
7/31/2010
8/31/2010
9/30/2010
10/31/2010
11/30/2010
12/31/2010
1/31/2011
2/28/2011
3/31/2011
4/30/2011
5/31/2011
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
41
17
16
16
16
16
16
16
16
16
16
15
15
15
15
15
15
15
15
14
14
14
14
14
14
14
14
14
13
13
13
13
13
13
13
12
24
24
24
25
25
25
25
25
25
25
25
25
26
26
26
26
26
26
26
26
27
27
27
27
27
27
27
27
28
28
28
28
28
28
28
3,591
3,567
3,542
3,518
3,493
3,468
3,443
3,418
3,393
3,368
3,343
3,317
3,292
3,266
3,240
3,214
3,188
3,162
3,136
3,109
3,083
3,056
3,029
3,002
2,975
2,948
2,921
2,893
2,866
2,838
2,811
2,783
2,755
2,726
2,698
Amortization
Period
120
1
2
3
4
5
6
Date:
6/30/2011
7/31/2011
8/31/2011
9/30/2011
10/31/2011
11/30/2011
Payment
41
40.78
40.78
40.78
40.78
40.78
40.78
Annual
Interest
5.50%
12.37
12.24
12.11
11.97
11.84
11.71
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
12/31/2011
1/31/2012
2/28/2012
3/31/2012
4/30/2012
5/31/2012
6/30/2012
7/31/2012
8/31/2012
9/30/2012
10/31/2012
11/30/2012
12/31/2012
40.78
40.78
40.78
40.78
40.78
40.78
40.78
40.78
40.78
40.78
40.78
40.78
2,176.29
11.58
11.44
11.31
11.17
11.04
10.90
10.76
10.63
10.49
10.35
10.21
10.07
9.93
Amortization Schedule
Principal
28.41
28.54
28.67
28.80
28.94
29.07
Balance
2,698
2,669.79
2,641.25
2,612.57
2,583.77
2,554.83
2,525.76
Amortization
Period
84
42
43
44
45
46
47
29.20
29.34
29.47
29.61
29.74
29.88
30.02
30.15
30.29
30.43
30.57
30.71
2,166.36
2,496.56
2,467.22
2,437.75
2,408.14
2,378.40
2,348.52
2,318.51
2,288.36
2,258.07
2,227.64
2,197.07
2,166.36
0.00
48
49
50
51
52
53
54
55
56
57
58
59
60
Amortization Schedule
2011
147.58
2012
128.30
341.77
2,496.56
88.5
77.0