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    SIA Grubhub Suggested Solution

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    Anushka Gupta

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    SIA Grubhub Suggested Solution

    Uploaded by

    Anushka Gupta
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    SIA Grubhub suggested solution

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    4 views1 page

    SIA Grubhub Suggested Solution

    Uploaded by

    Anushka Gupta

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 1

    Risk free rate 2.

    00% Sum of discounted FCF (2020 to 2027) 649,267


    Market risk premium 5.50% Terminal value 7,416,594
    Beta for rest/dining 0.97 * _____ * beta http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/Betas.html
    EV 8,065,861
    Corporate tax rate 21.00% Net debt (long-term debt at 2019) 493,009 Wd 6.11 %
    _____ $000's
    Equity value 7,572,852 bid price $7,300,000 per announcement
    Cost of debt 3.28% net assets $1,493,570 balance sheet value 2019 stockholder's equity
    P/E basis $ 3,198,520 uses ave EPS for 2017+2018 as 2019 negative
    Cost of equity 7.34% market cap $ 6,433,000 assumes stock price high of $70 x 92m shares
    P/E ratio 34.29 https://csimarket.com/Industry/industry_valuation_ttm.php?pe&ind=908
    Perpetuity growth rate 5.00% arbitrary assumption

    Wacc 7.00% 7.09% formula over-ridden by input to B14 rounded

    Amounts in $000's Achieved Achieved Achieved Forecast performance Soft landing Recurring
    2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 assumptions
    Sales 683,067 1,007,257 1,312,151 1,430,245 1,558,967 1,699,274 1,838,614 1,974,671 2,105,000 2,227,090 2,338,444
    Growth rate 47.5% 30.3% 9.0% 9.0% 8.2% 7.4% 6.6% 5.8% 5.0% 5.0% sector revenue growth rate 2020

    EBITDA 141,598 170,903 109,166 180,831 264,513 236,868 361,134 407,250 455,835 506,387 558,292
    EBITDA margin 20.7% 17.0% 8.3% 12.6% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% assume 2018 % resumed by new owners in 2 years
    adjustments 0 0 0 0 0 0 0 0 0
    (D&A) 51,848 85,940 115,449 125,839 137,165 149,510 161,770 173,741 185,207 195,949 205,747 assumes constant % of sales value
    D&A / sales 7.6% 8.5% 8.8% 8.8% 8.8% 8.8% 8.8% 8.8% 8.8% 8.8% 8.8% model assumes D&A constant % of sales

    EBIT (operating profit) 89,750 84,963 -6,283 54,992 127,348 87,358 199,364 233,510 270,628 310,438 352,545
    Interest (net) 102 3530 20493 20493 20493 20493 20493 20493 20493 20493 20493
    (Corporate tax) -9,335 2,952 -8,210 7,245 22,439 14,042 37,563 44,734 52,528 60,888 69,731
    Corporate tax rate -10.41% 3.62% 30.66% 21.00% 21.00% 21.00% 21.00% 21.00% 21.00% 21.00% 21.00% assume standard US tax rate from 2020

    NOPAT 98983 78481 -18566 27254 84415 52823 141308 168283 197607 229057 262321
    D&A 51848 85940 115449 125839 137165 149510 161770 173741 185207 195949 205747
    (Net capex) -18971 -43033 -55167 -137165 -149510 -161770 -173741 -185207 -195949 -205747 -216034 assume = to D&A plus sales growth factor
    (DWCR) 5068 -8711 -26648 -10760 -11729 -11648 -11373 -10894 -10206 -9308
    ________ ________ ________ ________ ________ ________ ________ ________ ________ ________
    Free Cash Flow 126456 33005 -10719 61310 28835 117689 145443 175970 209053 242726
    Disccount period 0.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0
    Discounted FCF -10018 53551 23538 89785 103699 117256 130188 141268

    L T Debt 335548 493009 493009 493009 493009 493009 493009 493009 493009 493009
    Interest on L T debt 1% 4% 4% 4% 4% 4% 4% 4% 4% 4%
    WCR 89,267 84,199 92,910 119,558 130,318 142,046 153,694 165,067 175,962 186,168 195,476 WC = trade receivables less payables
    WCR / sales 8% 7% 8% 8% 8% 8% 8% 8% 8% 8% assumes WC constant % of sales using 2018 as base

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