Valuation

Target 2016 2017 2018 2019 2020 Acquirer 2016 2017 2018 2019 2020
Free Cash Flow Free Cash Flow
EBIT 1.430.431.329,6 1.509.105.069,2 1.592.105.864,6 1.679.671.703,6 1.772.053.663,8 EBIT (383.753.978,1) (407.924.440,4) (433.606.582,7) (460.894.389,1) (489.887.657,0)
Less: Taxes 572.172.531,8 603.642.027,7 636.842.345,8 671.868.681,4 708.821.465,5 Less: Taxes (153.501.591,2) (163.169.776,2) (173.442.633,1) (184.357.755,6) (195.955.062,8)
Plus: Deprec. & Amort.. 106.948.459,2 112.830.608,0 119.036.274,9 125.583.253,5 132.490.316,0 Plus: Deprec. & Amort. 721.215.851,7 761.603.939,4 804.253.760,0 849.291.970,6 896.852.320,9
Less: Gross Capex 13.368.519,9 14.103.788,5 14.879.496,9 15.697.869,2 16.561.252,0 Less: Gross Capex 625.053.738,2 660.056.747,5 697.019.925,4 736.053.041,2 777.272.011,5
Less: NWC (296.274.957,3) (39.241.184,2) (41.399.449,3) (43.676.419,0) (46.078.622,1) Less: NWC (3.619.905.666,4) (163.999.303,9) (170.840.767,1) (178.065.352,3) (185.694.514,2)
Equals: Free Cash Flow 1.826.645.883,3 2.200.440.309,2 2.321.464.532,9 2.449.145.088,8 2.583.848.075,2 Equals: Free Cash Flow (2.810.891.645,9) 686.567.166,4 723.383.702,4 762.027.514,7 802.587.098,4
Period 1,00 1,00 1,00 1,00 1,00 Period 1,00 1,00 1,00 1,00 1,00
Mid-Year Convention 0,50 1,50 2,50 3,50 4,50 Mid-Year Convention 0,50 1,50 2,50 3,50 4,50
Discount Factor 0,97 0,90 0,84 0,79 0,74 Discount Factor 0,93 0,90 0,83 0,77 0,72
PV FCFF $1.765.770.984,4 $ 1.987.694.486,5 $ 1.959.576.042,8 $ 1.931.855.369,7 $ 1.904.526.840,2 PV FCFF $ (2.610.693.571,5) $ 614.540.802,1 $ 601.378.929,3 $ 588.385.464,5 $ 575.566.159,6

PV (Years 1- 5) 9.549.423.723,6 PV (Years 1- 5) (230.822.216,0)

PV (Terminal Value) 30.650.978.833,9 PV (Terminal Value) 7.266.522.765,0
Enterprise Value 40.200.402.557,5 Enterprise Value 7.035.700.549,0
Plus Cash 176.433.138,6 Plus Cash 7.626.889.406,0
Less Debt & Min. Int. 1.829.854.721,0 Less Debt & Min. Int. 571.015.087,0
Equity Value 38.546.980.975,1 Equity Value 14.091.574.868,0
Equity Value Per Share $ 220.899.604,44 Equity Value Per Share $ 39.350.949,09
Assumptions: Assumptions:
WACC 7,0% WACC 7,7%
Target D/E* 30,0% Target D/E* 20,0%
Target D/TC* 23,1% Target D/TC* 16,7%
Marginal Tax Rate 40,0% Marginal Tax Rate 40,0%
ke 8,8% ke 8,6%
Rf 7,03% Rf 7,03%
Rf - Rm 2,7% Rf - Rm 2,7%
Beta 0,64 Beta 0,59
Terminal Value Terminal Value
FCF 2020 2.583.848.075,2 FCF 2020 802.587.098,4
Terminal Growth Rate 3,0% Terminal Growth Rate 1,0%
Terminal Period WACC 9,4% Terminal Period WACC 9,0%

Newco 2016 2017 2018 2019 2020 Definitions

Free Cash Flow WACC = (D/(D+E))*[(1-T)*[Cost of Debt]]+(E/(D+E))*ke
EBIT 1.046.677.144,7 1.101.180.537,4 1.158.499.310,9 1.218.777.343,6 1.282.166.035,9 D = Debt
Less: Taxes 418.670.857,9 440.472.215,0 463.399.724,4 487.510.937,4 512.866.414,4 E = Equity
Plus: Deprec. & Amort. 828.164.330,0 874.434.566,4 923.290.054,0 974.875.243,2 1.029.342.656,0 T = Corporate marginal tax rate(i.e., 40%)
Less: Gross Capex 638.422.258,1 674.160.536,0 711.899.422,2 751.750.910,4 793.833.263,5 ke = Cost of Equity (Estimated using the Capital Asset Pricing Model)
Less: NWC (1.450.638.450,9) 5.049.786,2 7.632.528,2 10.422.658,9 13.302.663,3 NWC = Net working capital excluding cash & marketable securities
Equals: Free Cash Flow 1.481.296.139,7 3.095.297.640,9 3.264.721.039,7 3.443.337.093,5 3.631.511.032,9 Discount factor uses mid-year convention in which cash flows occur evenly
Period 1,00 1,00 1,00 1,00 1,00 throughout the year.
Mid-Year Convention 0,50 1,50 2,50 3,50 4,50 Rf = Risk free rate approximated by the 10-year U.S. treasury bond rate.
Discount Factor 0,96 0,89 0,82 0,75 0,69 Rm = Return on a broad based stock index
PV FCFF $1.422.560.578,8 $ 2.741.505.063,3 $ 2.666.800.149,2 $ 2.594.069.997,7 $ 2.523.174.429,5 Rm - Rf = Average historical equity risk premium since 1963
Period reflects months of actual data available for first forecast year, i.e.,
PV (Years 1- 5) 11.948.110.218,5 if have 9 months actual data, period 1 equals .25, if have one half
PV (Terminal Value) 42.893.965.301,3 year of data, period 1 is .5; if 3 months available, period 1 equals.75
Enterprise Value 54.842.075.519,8 FCF2020 is recalculated to reflect the maximum marginal tax rate rather than the
Plus Cash 7.803.321.544,6 effective tax rate.
Less Debt &&Minority
Min. Int.Interest 7.823.959.392,7 Target D/E* represents the future debt to equity ratio desired by the firm.
Equity Value 54.821.437.671,6 Target D/TC* represents the implied future debt to total capital ratio desired
Equity Value Per Share $ 108.785.080,02 by the firm.
WACC = 8,4%
Target D/E* 20,0%
Target D/TC* 16,7%
Marginal Tax Rate 40,0%
ke 9,5%
Rf 2,5%
Rf - Rm 5,5%
Beta 1,28
Terminal Value
FCF 2020 3.631.511.032,9
Terminal Growth Rate 2,0%
Terminal Period WACC 8,0%

Newco Internal Rate of Return on Acquisition

Purchase Price (including Trasaction Expenses) 2015 (15.129,8)

Free Cash Flows 2016 1.481.296.139,7
2017 3.095.297.640,9
2018 3.264.721.039,7
2019 3.443.337.093,5
2020 3.631.511.032,9
Terminal Value 42.893.965.301,3
IRR 9790718,1%