CC was very good quality, I like what I heard... and it is a challenging field to be in, but they are doing alright, and it seems to me they know what they are doing, and are working hard on all those issues.
Yeah, lots happening on that front. They are doing a recapitalization (Current shares stop trading today) tomorrow. Horrible sector (Yellow pages!) but interesting deep value situation.
Basically at $0.60 per preferred, you are getting into the new company at $10 per share and some warrants too.
As of tomorrow, these are the numbers:
28 Million shares, some 3-4M warrants (10 years) strike at $29-ish. I love them warrants!
800M senior debt due 2018 at 9.25%
107M subordinate debt (convertible at slightly below $20) due 2018+ (Forget exact date).
Company has two segments:
Online: Growing 12-14% organically
Print: Shrinking 20-25% yearly.
Current run-rate based on Q3 is about 140M EBITDA from online, 400M EBITDA from print. 2012 EBITDA is going to come in around 570-575M or so.
Whats a fair valuation on that kind of company? Some napkin math follows:
400M EBITDA run-rate at a deep discount of only 1.5x EBITDA gets us 600M.
140M online at a more acceptable 7x EBITDA multiple gets us 980M
50M in cash on hand after recap (Should be more but being conservative)
50 + 600 + 980 = 1630M.