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Dex Media, Inc. Message Board

  • joelsilver29 joelsilver29 Nov 8, 2013 11:22 PM Flag

    sea

    yes i agree with alot of those comments...you keyed in on the metric that matters most..free cash flow..and a declining one at that is roughly 400 million a year. that is pro forma, and the enterprise value is 3.1 billion in debt plus 85 million in equity as of today, less cash of 250 million also less tax assets of 400 million ..anyway adding and subtracting those numbers we get the folloiwing..2535 adj total ent value divided by 400 million in free cash flow = 6.3 to 1....ultimately the pay down of this debt over time (and by the by I have no doubt that the strong cash flows from print will kick a ss at the rates of 400 million a year and the excess cash flow last year picked off 250 million face debt with just 98 million in cash..if that happens this year and next we are looking at picking off face debt of 1.3 billion..that is entirely possible..in the cc, Dee Jones said they will enter the market to buy back debt soon...point is that once that debt is wittled down and down and down...evetually the equity will respond..yellow media is instructive....they have 400 million in equity..and 200 million in cash with 900 million in debt...they are growing digital revs at a rate of 10% per annum...those numbers are a crystal ball to where I think DXM will be in 3 years..almsot metric by metric..if we have a 400 million equity we will be at 22 easy on the price..one thing we both agree on..very good chance we will survive ..its just going to be a long long time...and i have that....but near term i will suffer...i do think that the near term may hold major surprises....J Kyle Bass, Paulson Watsa and Schultz...all billionaires are getting a wee bit impatient with these rednecks in Dallas Texas and we may see some agitation via the likes of a carl icahn type

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    • i dunno where you got tax assets of 400 million from. that's certainly not what dex has on their books. even if you go with the generous valuation that houlihan lokey calculated during their merger valuation analysis, it's only $187 million...and that's likely quite a bit higher than what the company will ever be able to capture. really, it's disingenuous to factor that into their enterprise value anyway. ev should really represent what you net pay if you were to buy the company out. you have to pay off the debt, you have to purchase the equity, but you get the benefit of the cash on hand. those tax assets go away in a buyout...you could not benefit from them. their enterprise value is, at a basic level, 2851M (debt) + 79M (equity) - 234M (cash) = 2696M. but, if you really want to get picky, there are some liabilities of about 160M related to employee benefits (unfunded pension liabilities and retiree insurance) that can be added to the ev equation, taking the enterprise value a little over 2850M. unlike the tax assets, these employee obligations do truly impact enterprise value.

    • just to add to that possibility of agitation by an activist investor...there is a way for the shareholders to get a very quick way to see the value of their shares tripled at least..as I said YP will eventually buy DXM,...its hard to get customers for the long term, but once u acquire them...and the ads work, loyalty of those customers is unshakable..thats why the window of opportunuity is closing YP has 600k of advertsiers..350k which are digital..DXM has also 600k of advertsiers..200k of which are digital, at least in part......currently YP na dDXM have a partnership where YP ad products are embedded in DXM's listings....intrigueingly, this is how DEXONE and Superpages started out...again the tieup is inevitable...the point is that YP wants those DXM advertsiers so they can sell and cross sell...the merger will happen..Again....this is how the deal could get done...Cerberus, a private equity firm is in a joint partnership with AT and T to run YP....the private equity firm could offer YP shares or inject private equity of 1 billion into DXM deal that would per credit agreements of DXM go to pay off debt....that would drastically cut debt down, along with 600 million in debt that DXM would pay off in 2014..such that debt would be manageable..the DXM shreholders wouldnt get cash for their shares but YP stock...again..these billionaires see Dee Jones and Peter McDonald just going through the motions every day so they cab draw their huge salaries...on the conf call..when asked the most important questioon..how will u grow dig revenues.there was no passion in their response..no deep thought went into that question..they are just there for the salaries...i think Paulson sees that and Bass and Watsa and the others...and agitation will happen..a Carl Icahn will appear...why? the value is there it just needs to be unlocked 1 billion in privatre equity plus the 400 million in tax assets, the 250 million in cash and the 600 million in debt paydiowns in 2014..

      • 1 Reply to joelsilver29
      • "this is how DEXONE and Superpages started out"

        i don't know what you mean by this. please explain.

        again, i don't know where you're getting "400 million in tax assets". i think you need to do some research there. houlihan lokey (the consultant that both dexo and spmd used for valuation purposes to price the merger) valued those assets at $187 million, and that's high. besides, like i said...change in control causes those assets to go away. any potential acquirer would not consider them in terms of the attractiveness.

 
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