Cheap Cheap Cheap I wondered if there is another way to value Argex....and i came up with a very accurate way. It is based on what PPG just paid for Akzos division. They really paid 6.26 yrs of payback. They paid $1Billion for and immediate impact of $60 million to the bottom line and a three year impact of $160Million. So lets apply the impact of Argex to PPGs bottom line.
Here is the Grid:
BOTTOM LINE IMPACT AKZO Payback in Years Amount Paid
$160 Million in three years 6.25 $1 Billion
Bottom Line Impact Argex Savings in yr 3
Case 1 (NA only) $200Million 6.26 $1.25 Billion or $8/sh
Case 2 Worldwide Supply of TiO2
180,000tonsX$2500 in savings
equals $450Mill/yr 6.26 $2.8 Billion or$20/share
Cheap Brothers...Very Cheap!!!!