"Buildings products companies generally trade at a multiple of 6.5 to eight times EBITDA, whereas agribusinesses trade at a higher multiple of eight to 10 times. Graincorp is trading at a multiple of 7.2 times, Nufarm at 8.6 times and ABB at 9.2 times, although that includes a takeover premium element because of the Viterra offer.
The EBITDA of the sugar business is about $140m-$150m and a multiple of 10 times would give an enterprise value of $1.4bn-$1.5bn. The EBITDA of the remaining activities is about $300m and a multiple of eight times would produce an enterprise value of $2.5bn, for an aggregate value of $4bn."
CSR shares outstanding: 1.316 bn EV of sugar (and indicative price by Bright Foods): 1.5 bn EV of building: 2.5 bn EV (cash) per share of sugar: $1.14 EV per share of building: $1.90 Sum of parts EV per share: $3.04
CSR Price at posting:
$6.15 Sentiment: None Disclosure: Held
