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Smith & Wesson Holding Corporation Message Board

  • indubitably23 indubitably23 Mar 28, 2013 3:39 PM Flag

    SWHC trades @ 4.5x LTM EBITDA!

    Since I can't paste in charts / tables and I don't feel like creating a web page...
    4/30 2012A LTM 4/30 2013E
    TEV / Rev 1.4x 1.1x 1.0x
    TEV / EBITDA 9.3x 4.5x 3.8x
    P/E 22.7x 8.7x 7.6x

    Btw, I've seen this posted a couple times, so to clarify...shares short over the month has remained relatively constant. Beginning of the month was 14.58M and 14.60M as of yesterday.

    I'll build an LBO over the wk end proving the viability of a takeout.

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    • I think the market assumes that SMHC buys all of the Freedom assets. It is a big bite and they will sell off pieces to reduce the ultimate purchase price. I think it creates a monster of a company, covering almost every market segment with a great brand. I will give this management team a year from the acquisition date, and I suspect I will be happy.

    • Yes. Something will be done here. Deals like this do not go undone. So, in the coming short term, one of two things will happen - SWHC buys another or SWHC gets bought. There are no other options.

      • 1 Reply to perple_haze3890
      • LBO analysis summary:

        Purchasing @ 5.1x upcoming 4/30 EBITDA provides a 35% control premium (EV = ~$800M)

        Selling or Re-IPO'ing at 6.75x in 3 yrs returns 33% IRR and in 4 yrs 28% IRR.

        Conservative deal assumptions:
        - Used the research analyst forecast
        - Pegged growth @ 2.0% beyond CY15
        - Normalized EBIT margin of 20.7%
        - 2.9x debt / EBITDA
        - All senior debt @ 7%
        - Minimum cash requirement of $30M
        - CAPEX, Working Capital and D&A as a % of revenue pegged to LTM on a go-forward basis

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