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Advance Auto Parts Inc. Message Board

  • rickojrs rickojrs Nov 9, 2012 3:10 PM Flag

    cash flow supports $95 buyout

    Private equity could easily buy out AAP at $95 and still get extremely high returns. At $85, private equity(pe), after buying AAP, could easily cut SG&A expenses to be more aligned with Azo, ORLY and significanty boost cash flow and earnings in three years. With the SG&A improvement, PE could sale AAP in three years at a minimum of $140, with a possible price of $160. PE would then capture all of the stock appreciation gains from $95, on the whole 73 million shares outstanding. Additionally, PE would also gain on debt that is paid off from cash flows while under the PE umbrella. from my calulations, it appears that PE will make returns that exceed 35% per year!!!

    Sentiment: Strong Buy

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