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NuStar GP Holdings, LLC Message Board

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  • rrb1981 rrb1981 Sep 6, 2010 7:29 PM Flag

    Infrastructure Spending-big boost on Tuesday

    I looked up my numbers:

    Acquisition price was $450 million
    Inventory was $100 million (they may have monetized this and held less inventory etc, I include the $100 million in as part of the price, bringing it to $550 million. Next I add the $61 million hedging loss that they recognized. Some of this may be duplicate accounting (presumably this hedging was to protect inventory and perhaps some of the losses were recouped as commodity prices changed after the charge was taken, but I assume it was all cash and real, bringing the total price to $611 million).

    According to the 2nd Q conference call, they had adjusted ebitda of $150 million in '08, $70 million in '09 and $40 million YTD in '10. That is a total of $260 million in ebitda in 2.5 years. That comes out to a 5.875x multiple, which is better than 7x which is what I had just posted.

    The asphalt business has proven to be a lumpy acquisition in terms of ebitda which is presumably why they didn't want to pay a tremendous multiple.

    My hope is that they can dampen the fluctuations and push the ebitda closer to $100 million annually.

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    • your numbers may be on the mark
      however i was talking bout the demand part of the equation.
      ive had several clients tell me that when the needed asphalt the prices for the pure product had gone up markedly.
      now its true i do not know who supplied them with the product however if the use rises nsh should share in the supplying and hopefully increase not only revenue but the net profitability of the company.
      i was only trying to project the govt.program vis a vie nsh.
      naturally it may never come to fruition especially with that anti business clown in the white house.
      now no nasty political mail please just my opinion.
      good investing

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