Post by
RetireSoonerThanLater on Mar 04, 2019 5:47pm
Valuation - Another Kick at it- EV/EBITDA with Xylitol plant
Found this article re xylitol
https://www.biofuelsdigest.com/bdigest/2018/03/21/the-sweet-four-fortess-acquires-s2g-taking-xylitol-to-demo-scale-cargill-begins-commercial-production-of-evolvas-stevia/
Says 20,000tons per year = $40m in EBITDA
So...
Current analyst forecast is 6.5 EV / EBITDA (Raymond James)
Demo and Full scale xylitol plants are $5m and $150m build costs (per article above)
Say this $155m adds to current debt for calculation purposes:
EV = Market cap + $209m current debt - $33m cash + $155m new debt
EBITDA = $36m (forecast run rate) + $40m xylitol
at 6.5x EV / EBITDA ....solve for market cap .... = $163m
$163m / 15m shares = $10.87 / share.
Xylitol will also improve eff of DP plant, for added bonus.
Given their string of bad luck in the past, you'd think they were in line for some good luck in the future. The improving results from the current plant is a good indication of the quality of the people there now. Extrapolating this performance I am having some more confidence in FGE.