Sample Business Valuation Report

Business Valuation

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

Trading Comparable
Company name Share price Eps P/E
Tesco 256.7 14.7 17.46
Morrisons 252 13 19.38
Average 254.35 13.85 18.42
Valuation
Target company EPS 12.7
Average competitors P/E 20.71
Implied share price 276.57
Current share price 321
Upside from current share price 66.65

Company name Share price Eps P/E
Sainsburry 321 12.7 25.29
Transaction comparable
Target Company
name Transaction date Transaction value EBITDA (million) TV / EBITDA
Tesco 02/05/18 20239 270 74.9592592593
Morrisons 23/04/18 215331.144 806 267.1602282878
Target Company
name Transaction value EBITDA (million) TV / EBITDA
Target company
sainsburry 160347523 121
1325186.1404958
7
Discounted cash flow model
Tax
Rate 35.0%
Net
Debt $83.4
Shares 35.021
Unlevered Free Cash Flow Calculation

Calendar Year Ending December 31, CAGR
2007A 2008P 2009P 2010E 2011E 2012E 2008-2012
EBIT $120.0 $126.2 $133.2 $137.7 $142.4 $147.3 3.9%
Plus: Non-deductible Goodwill Amort. - - - - - -
EBITA $120.0 $126.2 $133.2 $137.7 $142.4 $147.3 3.9%
Less: Provision for Taxes (42.0) (44.2) (46.6) (48.2) (49.9) (51.6)
Unlevered Net Income $78.0 $82.0 $86.6 $89.5 $92.6 $95.8 3.9%
Plus: D&A (excl. non-deductible GW
amort.) 15.3 15.9 16.7 16.0 15.6 15.4
Less: Capital Expenditures (18.0) (16.0) (14.1) (14.6) (15.1) (15.6)
Less: Increase in Net Working Capital (9.5) 8.3 3.1 3.2 3.3 3.4
Unlevered Free Cash Flow $65.8 $90.2 $92.3 $94.2 $96.4 $99.0 2.3%
Total Enterprise Value Total Equity Value
Terminal EBITDA Multiple Terminal EBITDA Multiple
7.5x 8.0x 8.5x 7.5x 8.0x 8.5x
Discoun
t 10.0%
$1,042.
4
$1,088.
1
$1,133.
9
Discoun
t 10.0% $959.0
$1,004.
7
$1,050.
5
Rate 11.0% 1,003.0 1,046.7 1,090.4 Rate 11.0% 919.6 963.3 1,007.0
(WACC) 12.0% 965.5 1,007.3 1,049.1 (WACC) 12.0% 882.1 923.9 965.7
Implied Perpetuity Growth Rate
Total Price Per
Share
Terminal EBITDA Multiple Terminal EBITDA Multiple
7.5x 8.0x 8.5x 7.5x 8.0x 8.5x
Discoun
t 10.0% 1.0% 1.5% 1.9%
Discoun
t 10.0% $27.38 $28.69 $30.00
Rate 11.0% 1.9% 2.4% 2.9% Rate 11.0% 26.26 27.51 28.75
(WACC) 12.0% 2.8% 3.3% 3.8% (WACC) 12.0% 25.19 26.38 27.58
DCF Analysis (2008-2012): Perpetuity Growth Method

Total Enterprise Value Total Equity Value
Terminal Perpetuity Growth Rate Terminal Perpetuity Growth Rate
3.0% 3.5% 4.0% 3.0% 3.5% 4.0%
Discount 10.0% $1,260.8 $1,335.1 $1,421.7 Discount 10.0% $1,177.4 $1,251.7 $1,338.3
Rate 11.0% 1,103.6 1,158.0 1,220.1 Rate 11.0% 1,020.2 1,074.6 1,136.7
(WACC) 12.0% 981.4 1,022.5 1,068.8 (WACC) 12.0% 898.0 939.1 985.4
Implied Terminal EBITDA Multiple Total Price Per Share
Terminal Perpetuity Growth Rate Terminal Perpetuity Growth Rate
3.0% 3.5% 4.0% 3.0% 3.5% 4.0%
Discount 10.0% 9.9x 10.7x 11.6x Discount 10.0% $33.62 $35.74 $38.22
Rate 11.0% 8.7x 9.3x 10.0x Rate 11.0% 29.13 30.68 32.46
(WACC) 12.0% 7.7x 8.2x 8.7x (WACC) 12.0% 25.64 26.82 28.14
(1) Assumes net debt of $83.4mm as of 5/16/08.
(2) Assumes outstanding diluted shares of 35.021 million.