EBITDA 5.4 vs average in group: 6.6 IPIC will provide a $250 million credit backstop facilityand allow Nova to operate as an independent company. Nova ChiefExecutive Officer Jeffrey Lipton was seeking to raise financingamid concern falling chemical demand and deteriorating creditmarkets would prevent the company from meeting lendingrequirements.
Nova “got a reasonable price,” said Hassan Ahmed, a NewYork-based analyst at HSBC’s securities unit in the U.S. “It’sa bit on the lower side, but keeping in mind the currenteconomic environment and their debt situation, I think this wasthe right thing to do.” Ahmed rates the stock “neutral.”
Nova soared $4.83, more than tripling to $6.49 yesterday inNew York Stock Exchange composite trading. The shares haddropped 96 percent in the year up to yesterday.
4.7 Times Earnings
Nova, which is incorporated in Calgary and run fromPittsburgh, said its board approved the transaction. Investorswill meet in April, when the deal will need the approval of atleast two-thirds of voting shareholders.
The sale price is 4.7 times last year’s earnings beforeinterest, taxes, depreciation and amortization, and it’s 5.4times Nova’s normal ebitda, Ahmed said. The average sellingprice of 150 recent commodity chemical deals is 6.6 timesebitda, he said.