Railroad industry multiples
Hi guys,
I have to perform a transaction multiple for a US railroad company. We have transaction multiple information about three past merger deals in the railroad industry.
The multiples presented are:
P/E , P/B , EV/Sales and EV/Ebitda. We have to decide which multiples are usefull in this industry.
Given high capital intensity and differnces in capital structures I think I should only focus on EV multiples (EV/S and EV/Ebitda). Do you guys agree on this?
Moreover, the projected synergies in % of operating expenses for this merger are projected at 17%. However, the transaction multiples provided are for deals with 20-30% synergies. Is there a way to control for this?
Thank you very much in advance!
EV/EBITDA and P/E. Use both synergized and unsynergized multiples
Thanks! Why only these two multiples?
How can I calculate unsynergized multiples? E.G. synergeries are 22.3% of operating costs. Can I than just divide multiple by 122.3 and multiply by 100 to find unsynergized?
Thank you very much in advance man!
EV / EBITDA - its going to be pretty high. Also look at public comps in addition to transaction comps. There are some publicly traded rail / rail car mfg companies ie RailAmerica.
Thank you very much! Why only the EV/Ebitda? And is there any specific reason to also look at transaction multiples? Since this company is part of a merger, I think I should only look at transaction multiples? It is worth more to the acquirer than to other companies right?
is this for a case study? you said you have info on past rail-related transactions, so assume you have multiples, too?
if you have access, last 10-year EV/EBITDA on its peers would tell you how the industry (in a perfect, including all rail-related companies) has been trending.
Sed voluptatem sunt ipsa dicta eum qui dolorem. Assumenda consequuntur consequatur qui numquam doloribus hic.
Et libero quia ad numquam voluptas quibusdam nemo accusamus. Autem sint ut ab ut eveniet facilis architecto. Quis et rerum ut molestiae dolorum.
Doloribus qui impedit aspernatur minima ipsa aspernatur voluptatibus. Veritatis adipisci repellat totam eveniet. Itaque et aut ducimus omnis et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...