Craig Herkert, WMT's "president and CEO of the Americas" will take over. He is 49. Prior to WMT, Herkert was with Albertson's -- the company that SVU purchased 3 years ago in a massive acquisition whose synergies have largely never been realized. SVU stock was down on the news.
From the Strib: "Noddle was named CEO in 2001 and chairman of the board in 2002. He steered the company through its largest acquisition in 2006: the $17.4 billion purchase of Albertson's Inc. Supervalu paid $3.8 billion in cash and $2.5 billion in stock and took on $6.1 billion in Albertson's debt. Its partners in the deal included Rhode Island's CVS Corp., New York-based Cerberus Capital Management, Kimco Realty and Schottenstein Stores Corp. of Columbus, Ohio."
By coincidence, I have been modeling and studying SVU this semester. I value its stock at $37.29. This number is based on a 50/50 weighting of discounted cash flow and EV/EBITDA, using comp companies of Kroger, Safeway, and Wal-Mart. The DCF assumes zero revenue growth through 2013. (Sorry for the small screen shots -- I'll try to adjust)
1) Financial Ratio Analysis
2) DCF Analysis (note no revenue growth through 2013)
3) EV/EBITDA Analysis| 2009 | SVU | KR | SWY | WMT | Industry Average | ||||
| Equity Value | |||||||||
| 52 wk high | 35.61 | 30.32 | 32.65 | 63.17 | |||||
| 52 wk low | 9.02 | 19.46 | 17.23 | 46.42 | |||||
| Shares O/S (m) | 211.75 | 652.34 | 427.05 | 3910 | |||||
| 4,725 | 16,237 | 10,651 | 214,248 | ||||||
| (add) LT Debt Value | 7,968 | 7,505 | 4,701 | 34,549 | |||||
| (subrtract) Cash Value | 240 | 263 | 383 | 7,275 | |||||
| Enterprise Value | 12,453 | 23,479 | 14,969 | 241,522 | |||||
| EBITDA | -1,100 | 3,893 | 2,994 | 29,537 | |||||
| EV/EBITDA | NM | 6.0 | 5.0 | 8.2 | 6.4 | ||||
| SVU Valuation based on Industry EV/EBITDA: | |||||||||
| 1) | Normalize EBITDA as % of sales: | ||||||||
| EBIT | DA | EBITDA | Sales | % | Weighting | ||||
| 2008 | 1,648 | 1,017 | 2,665 | 44,048 | 6.1% | 60% | 3.6% | ||
| 2007 | 1,305 | 879 | 2,184 | 37,406 | 5.8% | 30% | 1.8% | ||
| 2006 | 435 | 311 | 746 | 19,864 | 3.8% | 10% | 0.4% | ||
| 5.8% | |||||||||
| 2) | Estimate FY 2010 Sales: | ||||||||
| 43,239,600 | |||||||||
| 3) | Multiply #1 and #2 to obtain estimated FY 2010 EBITDA: | ||||||||
| 2,489,423 | |||||||||
| 4) | Apply multiple to obtain estimated FY 2010 Enterprise Value: | ||||||||
| 15,938,531 | |||||||||
| 5) | Add back estimated cash and subtract estimated debt to obtain Estimated 2010 Market Capitalization | ||||||||
| 8,376,531 | |||||||||
| 6) | Divide by shares outstanding (diluted) | ||||||||
| $38.96 | |||||||||
Is the mpls deal maker on vacation? No posts since May 6th! Guess there is no news...
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