Oct 192015
 

On August 10, 2015, Berkshire Hathaway and Precision Castparts issued a joint press release announcing  that the boards of directors of Berkshire Hathaway Inc. (NYSE: BRK.A; BRK.B) and Precision Castparts Corp. (NYSE: PCP) have unanimously approved a definitive agreement for Berkshire Hathaway to acquire, for $235 per share in cash, all outstanding PCP shares. The transaction is valued at approximately $37.2 billion, including outstanding PCP net debt.

In a notice (dated October 13, 2015) of a special meeting to PCP shareholders to be held on November 19, 2015 to vote on this proposal, PCP’s financial advisor, Credit Suisse, provides a valuation of the company by performing (1) a comparable multiples analysis, (2) a comparable transactions analysis, and (3) a discounted cash flow analysis.

(1) Comparable Multiples Analysis – Taking into account the results of the selected companies analysis, Credit Suisse applied enterprise value multiple ranges of 10.0x to 11.0x to PCP’s CY 2015E EBITDA and 9.0x to 10.0 x to PCC’s CY 2016E EBITDA.  The selected companies analysis indicated an implied valuation reference range of $180 to $203 per share of PCP as compared to the proposed merger agreement of $235 per share.

(2) Comparable Transactions Analysis – Taking into account the results of the selected transactions analysis, Credit Suisse applied an enterprise value multiple range of 11.5x to 13.5x to PCP’s last 12 months EBITDA as of June 28, 2015.  The selected transactions analysis indicated an implied valuation reference range of $218 to $260 per share of PCP as compared to the proposed merger agreement of $235 per share.

(3) Discounted Cash Flow Analysis – Credit Suisse performed a discounted cash flow analysis of PCP by calculating the estimated net present value of the projected after-tax, unlevered free cash flow of PCP based on company forecasts.  Credit Suisse applied a range of terminal value multiples of 9.5x to 10.5x to PCP’s estimated FY 2021E EBITDA of $4.21 billion and discount rates ranging from 7.0% to 9.0%.  This analysis indicated an implied valuation reference range of $215 to $256 per share of PCP as compared to the proposed merger agreement of $235 per share.

ValueWalk and Investing.com published this blog post on October 20, 2015.

 

 

 Posted by at 11:50 pm

Warren Buffett on Miami Dolphins?

 Uncategorized  Comments Off on Warren Buffett on Miami Dolphins?
Oct 132015
 

From the Omaha World-Herald (October 4, 2015):

What do Warren Buffett and Ndamukong Suh have in common?

A love of investing, for sure. The two have become friends in recent years, with Suh, the former Nebraska football star and now NFL player, conferring with Buffett, CEO of Berkshire Hathaway Inc., about financial matters.

Both are wealthy, although Buffett’s billions are on a higher scale than Suh’s $144 million playing contract with the Miami Dolphins.

Both have a philanthropic sense, with Buffett giving away billions each year and Suh contributing to the Nebraska football program.

Both are NU graduates.

Both were on the Dolphins sidelines for last week’s home opener, which Miami lost 41-14. Both wore shoulder pads and turquoise-colored jerseys bearing No. 93.

 

Buffett in Miami

 Posted by at 2:15 am