So it's nice to see some big IB deals and capital raises in the headlines. GM's IPO, Intel's acquisition of McAfee and BHP attempting to acquire Potash.
GM http://online.wsj.com/article/SB10001424052748703…
Intel http://online.wsj.com/article/SB10001424052748704…
BHP http://online.wsj.com/article/SB10001424052748703…
I'm trying to make sense of some of these bids. Intel is paying $8bn for $300MM-$400MM of EBITDA. BHP is paying $40Bn for $1.5Bn of EBITDA. Even with synergies there is some serious growth baked into these purchase prices. Why pay for all the growth. Where is your upside?
I'm surprised that it took a 60% premium to get McAfee shareholders to agree to the deal. I have to think Goldman's M&A guys' "advice" is to get the deal done (and bring in the fee) at any purchase price.
60% premium in tech sector is not an unheard of number. McAfee has a strong brand name. Here is a 82.5% premium tech M&A: http://online.wsj.com/article/SB100014240527487033823045754324116527414…
I thought MS was the adviser on this deal? Where did you get the GS comment from?
Intel was advised by Goldman. Phantom, I agree it's not unheard of, but from a fundamentals perspective its hard to argue that you "got a good deal" when you build so much growth into your price.
paying 4 times sales is crazy in this economy, they could have probably acquired it for 2X sales, and went directly to shareholders if management declined
ebitda purchase multiples are very high right now...PE funds needing to buy companies for their funds and low returns elsewhere
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