TRS and private equity

Given TRS is back down below $7, I've rerun the private equity case (see details below). To be conservative, I've also revised the 2018 forecast to be in line with guidance. In summary, this suggests that at $7, P/E should be able to pay $10.50 (a 50% premium to yesterdays close) and still expect to generate an IRR of 30% p.a. What is also worth noting is that high yield debt markets have turned significantly more favorable in the past month, so debt funding shouldn't be a problem. I doubt private equity has gone anywhere and the share price declines only put this stock more into P/E sights. Either way, this is a great buy at $7.

	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6
0		2018	2019	2020	2020	2021
1	EBITDA	45	50	54	59	64
2	EBITDA growth		9%	9%	9%	9%
3	D&A	21	21	22	22	22
4	EBIT	24	29	33	37	42
5	Interest cost		12	12	13	11
6	PBT	24	16	21	25	32
7	PE mgt fees		1.5	1.5	1.5	1.5
8	PBT adj	24	15	19	23	30
9	Tax	7	4	6	7	9
10	PAT	17	12	15	18	23
11
12	Funds from operations	33	37	39	45
13	Working capital		1	1	1	1
14	Capex		16	17	17	17
15	Dividends			65
16	Free cash flow		16.0	-46.4	21.4	26.5
17	Acquisition cost	-296.45
18	Debt	158.9	142.9	189.3	168.0	141.4
19	Debt/EBITDA	3.5	2.9	3.5	2.9	2.2
20	Exit value					450.8
21	Private equity flows	-137.6		65		282.8
22
23	IRR	30%
24
25	Acquisition price	10.5		Share price at exit	15.60
26	Acquisition premium	50%		P/E ratio at exit	13.56
27
28	Exit EBITDA multiple	7
29	Debt cost	8%
30	Surplus cash on acqn	7