Post by
ocean112 on Mar 30, 2015 3:27pm
From CIBC
What's The Event Dow Chemical (DOW-NYSE) agreed to spin off its chlor-alkali and downstream derivatives businesses and merge them with Olin (OLNNYSE) in a tax-efficient Reverse Morris Trust transaction. The revenue of the newly-created company is expected to be $7 billion, with EBITDA of $1 billion. The transaction has a tax efficient consideration of $5 billion, and a taxable equivalent value of $8 billion to Dow and Dow shareholders.
Implications The transaction implies an EV/EBITDA multiple of 8x (on a tax efficient consideration) to 12.0x (on a taxable equivalent basis). Given Canexus' chlor-alkali 2014 EBITDA of $27 million, the OlinDow transaction multiple implies a North Vancouver value of $216 million to $329 million. North Vancouver Plant For Sale: Recall that Canexus has engaged a financial advisor to explore the potential sale of the North Vancouver chlor-alkali business. After the recent write-down, North Vancouver book value is $292 million and probably is a good indicator of an "ask" value. The sales of the North Vancouver plant and the NATO facility are independent of each other, and it is possible that both facilities can be sold
Comment by
HAWK37 on Mar 30, 2015 8:03pm
Is this from the same CIBC guy that had a $6 price target on Canexus and said that Blunderheim would sell for 'more than $400 million'? I think we can put him on "Ignore". RH
Comment by
mileshigh on Mar 31, 2015 7:25am
This post has been removed in accordance with Community Policy
Comment by
iawyll1 on Mar 31, 2015 9:47am
I know, Kherson could not buy enough of CUS when it was a $6.00, but then he sells it at $3 and puts the remaining money in PLT.UN, just to watch that stock go down to pennies.