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Best Bank In Town
Since 1872

Khakis ‘R Us
Valuation
MBA Investment Bankers LLC

January, 2014

Executive Summary

• Evaluation of NYC Capital Offer
— Comparable Companies Analysis
$24.64-$32.90
— Precedent Transaction Analysis
$21.99-$30.43
— Discounted Cash Flow Analysis
$25.03-$33.74

• Recommendations
— Counteroffer
$20/share + Earnout of 75% EBITDA over 3 years
$25.18-$30.03
— Defensive Strategy
Shareholder Rights Plan + Buyback
— One Year From Now
About Boots, Valuation Range

Khakis ‘R Us & MBA Investment Bankers LLC Confidential

2

Comparable Company Analysis

•

Comparables determined by Revenue, EBITDA, and EBIT figures.

•

Narrowed down group to Companies 3 & 8.

•

We chose the companies where the ranges fell within 50% above or below Khaki
‘R Us figures.

•

We used the median EBIT multiplier for the calculation for the low range figure and median EBITDA multiplier for the calculation for the high range figure.

Range: $24.64 – $32.90

Khakis ‘R Us & MBA Investment Bankers LLC Confidential

3

Precedent Transactions Analysis
•

For Precedent Transactions, the selection criteria was Revenue and EBITDA.

•

Selected comparable transactions for companies were within 50% of Khakis ‘R Us
EBITDA and Revenue.

•

Narrowed the selection to transactions 7, 8, 12, & 18.

•

We used the Median figures of Revenue and EBITDA as our range.

Range: $21.99 – $30.43

Khakis ‘R Us & MBA Investment Bankers LLC Confidential

4

Discounted Cash Flow (DCF) Analysis

 Beta of 2.235 used by identifying comparable companies based on similar EBITDA and Revenue.
 WACC of 13.97%
 Revenue CAGR of 5.4%

Range: $25.03 – $33.74

Khakis ‘R Us & MBA Investment Bankers LLC Confidential

5

Total Valuation

$200M

$20.00

<

$250.3M - $304.3M

$25.03 – $30.43

Executive Summary

• Evaluation of NYC Capital Offer
— Comparable Companies Analysis
$24.64-$32.90
—
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