....has anyone out there figured out the kind of financing that banks would be willing to put up, on behalf of Ginsburg (or any other bidder)? If adjusted EBITDA is somewhere around $100 million (does anyone want to contest me on this figure?), will financiers support, say, an 8x multiple, in a buyout?
Does anyone know how large Ginsburg's personal net worth is? Is he in a position to put in a good chunk of an equity investment here, through his own funds, or his associates? Or is he going to be looking to lever up the company for most of the purchase price, for him to take out all the common holders?
I still say that the most likely outcome is a bid from Ginsburg....with an initial offer range of probably $13-14. (This is down slightly from my earlier notion of a $14.25 takeout price...although with a "bump" from any intial offer, we might eventually get to that price.)
The only other question is whether the company's financial results have held up enough, to justify a bid in the $13-14 range.
My guess is that he's working to take it private. That's probably why the BOD had to make an indemnity deal a while back. Also, the language in the press releases about the "special committee" activities always stated they were "negotiating". The questions is at what price???
1) the indemnity deal was most likely a request of the new members that joined the board
2) all the leaks indicate that SG wants to take it private, that is what the original post is asking. Would any bank finance that transaction.
3) DGIT EBITDA was about $74 9 ME 9/30 so maybe 98 million for 2012 (course 2012 was an election year - very beneficial to DGIT's biz not sure they will make that in 13).
4) DGIT already has 455 Million in debt a buyout of the non-insider shares at $14 would cost about $370 million so the question is can they get this puppy financed at 8.5 x EBITDA.
My answer is that sounds pretty rich, definately that is way beyond bank financing, I can't imagine they get much more than 4.5 to 5.0 x from a bank and they'll only get that if they can tell a pretty good tale about why capex spending will decrease significantly and quickly - they spent $27 million in 9 ME 9/30.
This deal requires a lot of equity, I presume he needs a partner, not sure on his personal wealth