Post by
George98 on Jul 25, 2018 9:35am
Pet industry, key metrics from the latest deals & OPCO
I check the key metrics of the latest pet deals and the suitors have paid more than 15 times EBITDA and more than 2 times the annual revenue.
GIS paid more than 20 times Blue Buffalo's EBITDA and 6 times Blue Buffalo's revenue.
SJM acquired Ainsworth Pet Nutrition for 16 times EBITDA and 2.5 times revenue.
PETQ paid 15 times EBITDA and 2 times revenue to acquire VIP Petcare.
ZTS paid 30 times ABAX 's EBITDA and 7 times ABAX's revenue.
Mars paid 18 times WOOF's EBITDA.
The terms of many other deals in the pet sector were not disclosed.
OPCO's net debt was just $800,000 in March and the company generated more than $1 million in free cash flow in Q1, although Q1 is its slowest quarter according to the company. So its cash and cash equivalents will exceed its bank debt by Q3.
OPCO has consistent profits in the last five years according to the presentation.
OPCO's EBITDA will be about $3 million this year.
So I think that OPCO will not contiue trading less than 6 times its 2018 EBITDA and just 0.6 times its 2018 revenue.