It is a cashflow multiple for the purpose of the analysis. For...

It is a cashflow multiple for the purpose of the analysis. For example, AGL is currently valued at 15.1x PE and about 11.5x cashflow. Obvioulsy a recapitalised Alinita would not be priced as per AGL, so 9x was selected as being a reasonable proxy.

Based on the 9x multiple and a $310m EBITDA, the total enterprise value would be $2.76 billion (effectively the balance sheet value of the debt) - which is roughly comparable to what the proposed transaction by TPG is effectively pitching at when they are proposing a transaction that will convert 20% (ie $540m) of the debt to equity, plus issue a further $300m of new equity, have the recapitalised Alinta still owing $1.55 billion of debt and values the existing equity at $125m.

$1.55 + $0.54 + $0.30 + $0.125 = $2.515 billion + cash and receivables & stock on hand (net of current liabilities) $170m = $2.685 billion.

As I said in my post - open for discussion. If there are other views as to what the appropriate multiple is, lets discuss them, but I thought for the purposes of the exercise that 9x was probably a reasonable start point and had some inherent logic to it as per the above.