Atlantic Case
Royal Asset Package Valuation
DCF Valuation EBITDA - Depreciation EBIT - Taxes on EBIT + Depreciation - Capex - WK FCF Wacc Enterprise Value + Terminal Value + working capital Total EV (31/12/1983) EV/EBITDA 1984 EV/EBITDA 1985 EV/EBITDA avg. Terminal Value Growth Capex = Depreciation Monticello Mill financials Revenues Annual Capacity Utilization rate Tons Price per ton EBITDA margin Box Plants financials Revenues EBTIDA margin Combined Package financials Revenues EBITDA margin Depreciation EBIT Auxiliar: Capex New Capex Auxiliar: Depreciation New Capex depreciation Old Asset Base depreciation ACRS Total D&A Price paid Auxiliar: Taxes EBIT Taxes ITC Total Taxes 1983 $m $m $m $m 1984 (35) 11 1 12 1985 (37) 11 2 14 1986 (12) 4 3 7 1987 (17) 5 5 1988 (17) 5 5 1989 80 (24) (24) 1990 85 (26) (26) 1991 92 (28) (28) 1992 93 (28) (28) 1993 94 (29) (29) $m $m $m $m $m $m $m $m % $m $m $m $m x x x 1983 15,8% 303 109 40 452 12,6 6,4 9,5 1984 36 (71) (35) 12 71 (19) (3) 25 1985 71 (108) (37) 14 108 (31) (4) 50 1986 100 (112) (12) 7 112 (42) (4) 61 1987 99 (116) (17) 5 116 (10) 94 Price to pay IRR/WACC (x) IRR/WACC (x) 1988 101 (118) (17) 5 118 (10) 96 1989 101 (21) 80 (24) 21 (8) 68 1990 101 (16) 85 (26) 16 (6) 69 1991 101 (9) 92 (28) 9 (6) 67 1992 101 (8) 93 (28) 8 (6) 66 1993 101 (7) 94 (29) 7 (6) 66 TV FCF 101 (7) 94 (29) 7 (7) 65
1,05x 1,10x
-> ->
429 409
Tax shield ceiling (EBIT < 250) $m 250 -> Max. tax break that Atlantic Corp can accomodate Royal Proposal (excluding Timberland) 610,1 Price Wacc 6% EV/EBITDA 9x
2,0%
$m k ton % k ton $ / ton $m %
1983 153 661 90% 595 258 1983 1983 153 1983
1984 193 661 100% 661 292 24 12,6% 1984 256,9 12 4,5% 1984 450 36 8,0% (71) (35) 1984 19 1984 3 68 15,0% 71
1985 233 669 100% 669 349 56 24,1% 1985 329,5 15 4,5% 1985 563 71 12,6% (108) (37) 1985 31 1985 9 99 22,0% 108
1986 288 747 100% 747 386 84 29,1% 1986 362 16 4,5% 1986 650 100 15,4% (112) (12) 1986 42 1986 17 95 21,0% 112
1987 306 747 100% 747
DCF Valuation EBITDA - Depreciation EBIT - Taxes on EBIT + Depreciation - Capex - WK FCF Wacc Enterprise Value + Terminal Value + working capital Total EV (31/12/1983) EV/EBITDA 1984 EV/EBITDA 1985 EV/EBITDA avg. Terminal Value Growth Capex = Depreciation Monticello Mill financials Revenues Annual Capacity Utilization rate Tons Price per ton EBITDA margin Box Plants financials Revenues EBTIDA margin Combined Package financials Revenues EBITDA margin Depreciation EBIT Auxiliar: Capex New Capex Auxiliar: Depreciation New Capex depreciation Old Asset Base depreciation ACRS Total D&A Price paid Auxiliar: Taxes EBIT Taxes ITC Total Taxes 1983 $m $m $m $m 1984 (35) 11 1 12 1985 (37) 11 2 14 1986 (12) 4 3 7 1987 (17) 5 5 1988 (17) 5 5 1989 80 (24) (24) 1990 85 (26) (26) 1991 92 (28) (28) 1992 93 (28) (28) 1993 94 (29) (29) $m $m $m $m $m $m $m $m % $m $m $m $m x x x 1983 15,8% 303 109 40 452 12,6 6,4 9,5 1984 36 (71) (35) 12 71 (19) (3) 25 1985 71 (108) (37) 14 108 (31) (4) 50 1986 100 (112) (12) 7 112 (42) (4) 61 1987 99 (116) (17) 5 116 (10) 94 Price to pay IRR/WACC (x) IRR/WACC (x) 1988 101 (118) (17) 5 118 (10) 96 1989 101 (21) 80 (24) 21 (8) 68 1990 101 (16) 85 (26) 16 (6) 69 1991 101 (9) 92 (28) 9 (6) 67 1992 101 (8) 93 (28) 8 (6) 66 1993 101 (7) 94 (29) 7 (6) 66 TV FCF 101 (7) 94 (29) 7 (7) 65
1,05x 1,10x
-> ->
429 409
Tax shield ceiling (EBIT < 250) $m 250 -> Max. tax break that Atlantic Corp can accomodate Royal Proposal (excluding Timberland) 610,1 Price Wacc 6% EV/EBITDA 9x
2,0%
$m k ton % k ton $ / ton $m %
1983 153 661 90% 595 258 1983 1983 153 1983
1984 193 661 100% 661 292 24 12,6% 1984 256,9 12 4,5% 1984 450 36 8,0% (71) (35) 1984 19 1984 3 68 15,0% 71
1985 233 669 100% 669 349 56 24,1% 1985 329,5 15 4,5% 1985 563 71 12,6% (108) (37) 1985 31 1985 9 99 22,0% 108
1986 288 747 100% 747 386 84 29,1% 1986 362 16 4,5% 1986 650 100 15,4% (112) (12) 1986 42 1986 17 95 21,0% 112
1987 306 747 100% 747