Professional Documents
Culture Documents
Prepared By:
The Marquee Group
Case
(C$ millions)
Base Case
379
to
414
6.8 x
to
7.4 x
Best Case
494
to
539
8.8 x
to
9.6 x
Worst Case
274
to
298
4.9 x
to
5.3 x
2013
2014
2015
2009A
2010A
2011F
2012
2016
Base Case
EBITDA ($MM)
64.0
58.0
55.9
50.3
56.2
65.6
75.3
87.9
EBITDA Margin
14.2%
13.1%
nm
nm
12.7%
2.5 x
11.4%
2.3 x
11.8%
1.6 x
12.9%
1.0 x
13.7%
0.6 x
14.7%
0.1 x
nm
nm
nm
(41.3%)
17.1%
35.9%
39.1%
39.9%
64.0
58.0
55.9
57.3
69.4
85.8
99.7
111.4
EBITDA Margin
14.2%
13.1%
nm
nm
12.7%
2.5 x
12.5%
1.9 x
13.8%
1.2 x
15.7%
0.8 x
17.0%
0.4 x
18.0%
0.0 x
nm
nm
nm
31.5%
66.1%
67.7%
60.2%
53.0%
64.0
58.0
55.9
47.0
48.9
51.4
53.2
57.9
EBITDA Margin
14.2%
13.1%
nm
nm
12.7%
2.5 x
11.0%
2.5 x
10.9%
2.0 x
11.0%
1.5 x
10.8%
1.1 x
11.0%
0.7 x
nm
nm
nm
(74.0%)
(23.9%)
0.2%
7.3%
13.9%
The Summary Enterprise Values on this page use a WACC of 12.0% and a terminal value growth rate of 2.0% at the low end
of each range, and a WACC of 11.5% and a terminal value growth rate of 2.5% at the high end of each range.
(2)
Page 2 of 23
7/24/2014 7:19 AM
2011F EBITDA
Purchase Multiple of EBITDA
Purchase Price (Enterprise Value)
$55.9
6.5 x
$363.3
2012F
2013F
Multiple of
EBITDA
Amount
EBITDA
$50.3
$56.2
TRANSACTION FEES
% of
Capital
Interest Rate
Category
Fees %
(C$MM)
Cash on Hand
Revolver
Term Debt
Mezzanine
Total Debt
Equity Source
Preferred Shares
Management
KKZ
Total Equity
Div. Rate
8.5%
0.0%
0.0%
LIBOR - 1.0%
LIBOR + Spread
LIBOR + Spread
8.0%
Amount % of Cap.
6.6%
$25.0
1.3%
$5.0
$65.2
17.3%
$95.2
25.3%
% of Common
0.0%
7.1%
92.9%
100.0%
$376.7
0.0%
0.7%
4.0%
0.7%
$0.0
$0.8
$5.6
$2.5
$1.0
$1.0
$0.5
$0.0
$11.4
Amount
% of
Total
EBITDA
Multiple
(C$MM)
Purchase of Equity
Target Debt Refinanced
Transaction Fees
Total Uses of Capital
Revolver
Term Debt
Mezzanine
M&A
Due Diligence
Legal
Consultants
Other
Total Fees
100.0%
Capital Use
Fees
(C$MM)
0.5%
7.4%
29.7%
37.1%
74.7%
$2.0
$27.9
$111.8
$139.7
$281.4
0.5 x
2.0 x
2.5 x
5.0 x
Multiple
7.2 x
6.5 x
$300.3
$65.0
$11.4
$376.7
79.7%
17.3%
3.0%
100.0%
5.4 x
1.2 x
0.2 x
6.7 x
Page 3 of 23
Enterprise Value
Less: Net Debt prior to Close
Implied Equity Purchase Value
$363.3
$63.0
$300.3
$250.3
$10.0
$40.0
7/24/2014 7:19 AM
TAXES
- The acquisition is assumed to be a share purchase
- Tax rate assumed in the model:
- Blended CCA Rate assumed in the model:
- Opening tax loss carry forward (TLCF) balance:
- Opening Undepreciated Capital Cost (UCC) balance:
COSTS
- Sales Discounts and Commissions
- SG&A as a % of net Sales
- Manufacturing Costs grow at inflation
2.0%
5.5%
OPERATIONS
- Operating Days per Year
- Maximum Production (000's Cases per day)
2012
14.2
0.0
0.0
$14.2
2013
15.3
0.0
0.0
$15.3
2014
15.7
0.0
0.0
$15.7
2015
16.0
0.0
0.0
$16.0
VALUATION
- Low end of the discount rate (WACC) range:
- The discount rate range used is 11.0% to 12.5%
- The terminal year is valued using a perpetuity formula
2016
16.4
0.0
0.0
$16.4
EARNINGS ADJUSTMENTS
- The following one-time cost adjustments have been included in the model:
(C$ MM)
Restructuring
Adjustment 2
Adjustment 3
Total
2012
(2.0)
0.0
0.0
($2.0)
2013
(2.0)
0.0
0.0
($2.0)
2014
0.0
0.0
0.0
$0.0
2015
0.0
0.0
0.0
$0.0
2016
0.0
0.0
0.0
$0.0
35.0%
15.0%
$18.5
$170.5
350
16.5
11.0%
1.5%
6.5 x
TERMINAL YEAR
- EBITDA Margin is the avg. margin from 2012 to 2016
- This EBITDA Margin is used to calculate EBITDA
- Full cash taxes are paid (ie. no Deferred Taxes)
- Capex is equal to 2016 Capex grown at inflation
- Depreciation is equal to Capex
- No changes in working capital
Page 4 of 23
- Accounts Receivable
- Inventories
- Accounts Payable
30 days
40 days
30 days
7/24/2014 7:19 AM
2.50 x
0.25 x
Revolver
- Maximum Amount Available (C$ MM):
- Revolver outstanding can't exceed the following Margining Formula
on Accounts Receivable and Inventory:
- Accounts Receivable Percentage
- Inventory Percentage
- Interest on Undrawn Amounts (Stand-by Fee):
- Cash sweep of FCF After Scheduled Debt Repayments and Dividends
Senior Secured Term Debt
- Sr. Secured Term Debt / EBITDA at Close:
- Bullet payment due at the end of 2016
- Scheduled Principal Repayment from 2012 to 2016:
Principal Rpmt:
2012
10.0%
2013
15.0%
2014
15.0%
2015
20.0%
$40.0
Spread to LIBOR
1.00%
1.50%
2.00%
2.50%
2.75%
3.00%
3.25%
75.0%
50.0%
0.50%
MODEL CHECKS
2.00 x
YES
OK
TRIPPED
OK
OK
2016
40.0%
Mezzanine Debt
- Mezzanine Debt / EBITDA at Close
- Scheduled Principal Repayments
- PIK Interest Percentage:
If Total Debt / EBITDA in the previous year is:
2.50 x
$0.0
60.0%
> 3.50 x
Interest Coverage
- EBITDA / Interest Covenant
> 1.50 x
2012
$0.0
2013
$0.0
2014
$0.0
2015
$0.0
2016
$0.0
Common Shares
$0.0
$0.0
$0.0
$0.0
$0.0
Page 5 of 23
7/24/2014 7:19 AM
SCENARIO SWITCH
2012
2013
2014
2015
2016
Term
2.0%
2.2%
2.5%
2.5%
2.5%
2.0%
2.0%
2.2%
1.8%
2.2%
2.5%
2.0%
2.5%
3.0%
2.0%
2.5%
3.0%
2.0%
2.5%
3.0%
2.0%
2.0%
2.5%
2.0%
3.0%
5.0%
6.0%
5.0%
4.0%
2.5%
3.0%
5.0%
1.0%
5.0%
7.0%
3.0%
6.0%
7.0%
3.0%
5.0%
5.0%
3.0%
4.0%
5.0%
3.0%
2.5%
4.0%
2.0%
2.5%
2.5%
2.5%
2.2%
2.2%
2.2%
2.5%
1.8%
2.2%
2.5%
2.0%
2.7%
2.5%
2.0%
2.7%
2.2%
2.0%
2.7%
2.2%
2.0%
2.7%
2.2%
2.0%
2.5%
0.88
0.88
0.89
0.89
0.87
0.86
0.88
0.87
0.89
0.88
0.87
0.89
0.89
0.88
0.90
0.89
0.88
0.90
0.87
0.86
0.88
0.86
0.85
0.87
2.50%
2.75%
3.00%
3.25%
3.50%
3.50%
SALES SCENARIOS
Sales Price Growth
Base Case
Best Case
Worst Case
Sales Volume Growth
Base Case
Best Case
Worst Case
ECONOMIC SCENARIOS
Cost Inflation
Base Case
Best Case
Worst Case
FX Rate - US$ / C$
Base Case
Best Case
Worst Case
LIBOR
Base Case
Page 6 of 23
7/24/2014 7:19 AM
2010A
2011F
2012
2013
Projected
2014
2015
2016
Term
Exchange Rate
(US$ / C$)
0.71
0.77
0.84
0.88
0.88
0.89
0.89
0.87
0.86
Pricing
Sales Price Growth
Gross Sales Price per Case
(%)
2.1%
80.0
1.2%
81.0
1.6%
82.3
2.0%
83.9
2.2%
85.7
2.5%
87.9
2.5%
90.1
2.5%
92.3
2.0%
94.2
112.7
2.1%
(2.4)
110.3
105.1
2.3%
(2.4)
102.7
97.7
2.0%
(2.0)
95.7
95.3
2.0%
(1.9)
93.4
97.4
2.0%
(1.9)
95.5
98.8
2.0%
(2.0)
96.8
101.2
2.0%
(2.0)
99.2
106.1
2.0%
(2.1)
104.0
109.5
2.0%
(2.2)
107.3
340.0
16.2
5.5
345.0
16.3
5.6
348.0
16.5
5.7
350.0
16.5
5.8
350.0
16.5
5.8
350.0
16.5
5.8
350.0
16.5
5.8
350.0
16.5
5.8
350.0
16.5
5.8
Capacity
Operating Days
Maximum Units per Day
Annual Mfg. Capacity
(US$/case)
(C$/case)
(%)
(C$/case)
(C$/case)
(Days)
(000's cases / day)
(MM's cases)
Sales Volume
Sales Volume Growth
Annual Sales Volume
(%)
Capacity Utilization
(%)
Revenue
Gross Revenue
Discounts and Commissions
Net Revenue
(MM's cases)
(C$ MM)
(C$ MM)
(C$ MM)
4.9%
7.0%
3.0%
5.0%
6.0%
5.0%
4.0%
2.5%
4.1
4.3
4.6
4.7
5.0
5.3
5.5
5.8
5.8
74%
76%
80%
82%
86%
91%
96%
100%
100%
462.0
(9.9)
452.0
452.1
(10.5)
441.6
449.4
(9.0)
440.4
451.7
(9.0)
442.7
484.7
(9.7)
475.1
520.8
(10.4)
510.3
560.5
(11.2)
549.3
611.2
(12.2)
599.0
632.5
(12.6)
619.8
Page 7 of 23
7/24/2014 7:19 AM
Cost Inflation
Exchange Rate
Sales Volume
2009A
2010A
2011F
2012
2013
Projected
2014
2015
2016
0.71
4.1
0.77
4.3
0.84
4.6
2.5%
0.88
4.7
2.5%
0.88
5.0
2.5%
0.89
5.3
2.2%
0.89
5.5
2.2%
0.87
5.8
(US$/case)
30.0
23.0
53.0
30.0
24.0
54.0
31.0
24.0
55.0
31.8
24.6
56.4
32.6
25.2
57.8
33.4
25.8
59.2
34.1
26.4
60.5
34.9
27.0
61.9
(C$/case)
74.6
70.1
65.3
64.1
65.7
66.5
68.0
71.1
(C$/case)
(C$/case)
6.8
4.9
2.4
1.0
15.1
6.5
4.2
2.3
0.9
14.0
6.3
3.9
2.2
0.9
13.3
6.3
3.9
2.2
0.9
13.2
6.1
3.8
2.1
0.8
12.9
5.9
3.7
2.0
0.8
12.5
5.8
3.6
2.0
0.8
12.1
5.7
3.5
2.0
0.8
11.9
(C$/case)
$89.8
$84.1
$78.6
$77.3
$78.5
$79.0
$80.1
$83.0
(C$ MM)
173.2
132.8
306.1
167.5
134.0
301.6
169.4
131.1
300.5
171.1
132.4
303.5
184.1
142.5
326.7
197.8
153.1
350.9
212.3
164.3
376.6
230.8
178.7
409.5
(C$ MM)
28.0
20.0
10.0
4.0
62.0
28.0
18.0
10.0
4.0
60.0
29.0
18.0
10.0
4.0
61.0
29.7
18.5
10.3
4.1
62.5
30.5
18.9
10.5
4.2
64.1
31.2
19.4
10.8
4.3
65.7
31.9
19.8
11.0
4.4
67.1
32.6
20.2
11.2
4.5
68.6
(C$ MM)
$368.1
$361.6
$361.5
$366.1
$390.8
$416.6
$443.7
$478.1
(%)
(US$ / C$)
(MM's cases)
(US$/case)
(US$/case)
(C$/case)
(C$/case)
(C$/case)
COSTS IN MILLIONS
Variable Costs
Cacao
Sugars
Total Variable Costs
Fixed Costs
Labour
Energy
Supplies
Other
Total Fixed Costs
Total Cost of Sales
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
Page 8 of 23
7/24/2014 7:19 AM
(MM's cases)
4.1
2010A
4.3
2011F
4.6
2012
2013
4.7
5.0
Projected
2014
5.3
2015
2016
5.5
5.8
(C$ MM)
462.0
(9.9)
452.0
452.1
(10.5)
441.6
449.4
(9.0)
440.4
451.7
(9.0)
442.7
484.7
(9.7)
475.1
520.8
(10.4)
510.3
560.5
(11.2)
549.3
611.2
(12.2)
599.0
Cost of Sales
(C$ MM)
368.1
361.6
361.5
366.1
390.8
416.6
443.7
478.1
(%)
Adjustments
EBITDA
(C$ MM)
Depreciation
EBIT
(C$ MM)
Cash Interest
PIK Interest
Total Interest Expense
(C$ MM)
(C$ MM)
(C$ MM)
Term
5.8
632.5
(12.6)
619.8
4.4%
5.0%
5.2%
5.5%
5.5%
5.5%
5.5%
5.5%
20.0
388.1
22.0
383.6
23.0
384.5
24.3
390.4
26.1
416.9
28.1
444.7
30.2
473.9
32.9
511.0
0.0
64.0
0.0
58.0
0.0
55.9
(2.0)
50.3
(2.0)
56.2
0.0
65.6
0.0
75.3
0.0
87.9
79.9
14.7
49.3
14.8
43.2
15.0
40.9
16.5
33.8
17.1
39.1
17.7
47.9
18.4
57.0
19.0
68.9
16.7
63.1
(C$ MM)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
12.0
6.9
18.8
11.1
7.2
18.3
10.1
7.6
17.7
16.5
0.0
16.5
14.7
0.0
14.7
0.0
0.0
0.0
EBT
(C$ MM)
49.3
43.2
40.9
14.9
20.8
30.3
40.5
54.2
63.1
(C$ MM)
(C$ MM)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
5.2
5.2
0.0
7.3
7.3
8.3
2.2
10.6
12.8
1.4
14.2
18.1
0.8
19.0
22.1
0.0
22.1
Net Income
(C$ MM)
49.3
43.2
40.9
9.7
13.5
19.7
26.3
35.3
41.0
Preferred Dividends
Net Income to Common
(C$ MM)
0.0
49.3
0.0
43.2
0.0
40.9
2.1
7.6
2.1
11.4
2.1
17.5
2.1
24.2
2.1
33.1
2.1
38.9
14.2%
10.9%
13.1%
9.8%
12.7%
9.3%
11.4%
7.6%
14.1%
11.8%
8.2%
16.1%
12.9%
9.4%
19.0%
13.7%
10.4%
21.8%
14.7%
11.5%
25.4%
12.9%
Margins
EBITDA Margin
EBIT Margin
Return on Capital (1)
(1)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(%)
(%)
(%)
Defined as EBITDA divided by average Total Capital
Page 9 of 23
7/24/2014 7:19 AM
2010A
2011F
2012
2013
Projected
2014
2015
2016
49.3
14.7
0.0
0.0
0.0
64.0
43.2
14.8
0.0
0.0
0.0
58.0
40.9
15.0
0.0
0.0
0.0
55.9
9.7
16.5
6.9
5.2
3.6
41.9
13.5
17.1
7.2
7.3
(3.5)
41.6
19.7
17.7
7.6
2.2
(3.6)
43.6
26.3
18.4
0.0
1.4
(3.9)
42.1
35.3
19.0
0.0
0.8
(4.9)
50.2
Investing Activities
CAPEX
Other
Investing Cash Flow
(12.0)
0.0
(12.0)
(13.0)
0.0
(13.0)
(14.0)
0.0
(14.0)
(14.2)
0.0
(14.2)
(15.3)
0.0
(15.3)
(15.7)
0.0
(15.7)
(16.0)
0.0
(16.0)
(16.4)
0.0
(16.4)
$52.0
$45.0
$41.9
$27.7
$26.3
$27.9
$26.1
$33.9
(14.4)
(11.2)
0.0
0.0
0.0
(2.1)
0.0
(27.7)
(7.4)
(16.8)
0.0
0.0
0.0
(2.1)
0.0
(26.3)
(6.1)
(16.8)
0.0
0.0
0.0
(2.1)
0.0
(25.0)
0.0
(22.4)
0.0
0.0
0.0
(2.1)
0.0
(24.5)
8.5
(44.7)
0.0
0.0
0.0
(2.1)
0.0
(38.4)
0.0
0.0
0.0
0.0
0.0
0.0
2.9
0.0
2.9
1.6
2.9
4.5
(4.5)
4.5
0.0
Operating Activities
Net Income
Depreciation
PIK Interest
Deferred Income Taxes
Changes in working capital
Operating Cash Flow
Financing Activities
Revolver Issuance / (Repayment)
Bank Term Loan Issuance / (Repayment)
Mezzanine Debt Issuance / (Repayment)
Issue (Redemption) of Preferred Shares
Issue (Redemption) of Common Shares
Preferred Dividends
Common Dividends
Total Financing Activities
Page 10 of 23
7/24/2014 7:19 AM
Adjust.
BS at
Closing
Projected
2014
2012
2013
0.0
35.3
43.1
1.6
80.0
0.0
36.3
40.0
1.6
77.9
0.0
39.0
42.8
1.6
83.5
2.9
41.9
45.7
1.6
92.1
4.5
45.1
48.6
1.6
99.9
0.0
49.1
52.3
1.6
102.9
324.5
40.0
0.0
444.5
322.2
40.0
0.0
440.0
320.4
40.0
0.0
443.8
318.4
40.0
0.0
450.4
316.0
40.0
0.0
455.9
313.4
40.0
0.0
456.3
27.9
27.9
28.5
2.3
58.7
13.5
30.0
2.3
45.8
6.1
32.1
2.3
40.5
0.0
34.2
2.3
36.5
0.0
36.5
2.3
38.8
8.5
39.2
2.3
49.9
2.0
35.3
43.1
1.6
82.0
(2.0)
314.5
0.0
0.0
396.5
10.0
40.0
0.0
28.5
2.3
30.8
27.9
(2.0)
48.0
2015
2016
50.4
65.0
0.0
115.4
46.8
139.7
186.5
50.4
111.8
139.7
301.9
55.6
100.6
146.6
302.8
62.9
83.8
153.8
300.5
65.1
67.1
161.4
293.6
66.5
44.7
161.4
272.6
67.4
0.0
161.4
228.7
Total Liabilities
146.2
214.4
360.6
348.6
341.0
330.1
311.4
278.7
Preferred Shares
Common Shares
Retained Earnings
Shareholder's Equity
0.0
25.0
225.3
250.3
25.0
45.2
(236.7)
(166.5)
25.0
70.2
(11.4)
83.8
25.0
70.2
7.6
102.8
25.0
70.2
25.1
120.3
25.0
70.2
49.3
144.5
25.0
70.2
82.4
177.6
$396.5
$48.0
$444.5
$440.0
$443.8
$450.4
$455.9
$456.3
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
Page 11 of 23
25.0
70.2
(3.8)
91.4
7/24/2014 7:19 AM
2009A
2010A
2011F
$14.7
$14.8
$15.0
2012
Projected
2013
2014
2015
2016
20
25
$14.2
$15.3
$15.7
$16.0
$16.4
$14.7
$14.8
$15.0
Page 12 of 23
$16.2
$16.2
$16.2
$16.2
$16.2
0.3
0.6
0.3
0.6
0.6
0.3
0.6
0.6
0.6
0.3
0.6
0.6
0.6
0.6
0.3
$16.5
$17.1
$17.7
$18.4
$19.0
7/24/2014 7:19 AM
35.0%
2012
2013
Projected
2014
2015
2016
$14.9
$20.8
$30.3
$40.5
$54.2
16.5
26.6
4.8
17.1
24.9
13.0
17.7
23.5
24.5
18.4
22.3
36.5
19.0
21.4
51.9
18.5
4.8
0.0
13.7
13.0
0.0
0.7
0.7
23.9
0.0
0.0
36.5
0.0
0.0
51.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
13.7
13.7
0.7
0.7
0.0
0.0
0.0
0.0
0.0
0.0
$0.0
$0.0
$23.9
$36.5
$51.9
5.2
7.3
10.6
14.2
19.0
0.0
5.2
5.2
0.0
7.3
7.3
8.3
2.2
10.6
12.8
1.4
14.2
18.1
0.8
19.0
2012
2013
2014
2015
2016
CCA Schedule
Blended CCA Rate
UCC Beginning
Plus: New Capex
1/2 of New Capex
UCC After New Capex (1/2 Year)
Less: CCA Available and Used
UCC Ending (C + D - E)
15.0%
170.5
14.2
7.1
177.6
26.6
$158.1
C
D
Page 13 of 23
158.1
15.3
7.7
165.7
24.9
$148.5
148.5
15.7
7.8
156.3
23.5
$140.7
140.7
16.0
8.0
148.7
22.3
$134.4
134.4
16.4
8.2
142.6
21.4
$129.4
7/24/2014 7:19 AM
2010A
2011F
2012
2013
Projected
2014
2015
2016
(days)
365.0
366.0
365.0
365.0
365.0
366.0
(C$ MM)
440.4
361.5
442.7
366.1
475.1
390.8
510.3
416.6
549.3
443.7
599.0
478.1
29.3
43.5
28.8
30.0
40.0
30.0
30.0
40.0
30.0
30.0
40.0
30.0
30.0
40.0
30.0
30.0
40.0
30.0
35.3
43.1
28.5
49.9
36.3
40.0
30.0
46.3
39.0
42.8
32.1
49.8
41.9
45.7
34.2
53.4
45.1
48.6
36.5
57.3
49.1
52.3
39.2
62.2
$3.6
($3.5)
($3.6)
($3.9)
($4.9)
Days In
Accounts Receivable
Inventories
Accounts Payable
Account Balances
Accounts Receivable
Inventories
Accounts Payable
Net Working Capital
Change in Working Capital
(C$ MM)
(days)
(days)
(days)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
Page 14 of 23
7/24/2014 7:19 AM
2012
2013
Projected
2014
2015
2016
5.00 x
2.50%
5.18 x
2.75%
4.34 x
3.00%
3.48 x
3.25%
2.74 x
3.50%
1.93 x
$0.0
0.0
0.0
$0.0
0.0
0.0
$0.0
0.0
2.9
$2.9
2.9
1.6
$4.5
Spread to LIBOR
Interest Rate (LIBOR minus 100 bp)
Annual Interest Income
4.5
(4.5)
$0.0
(1.00%)
1.50%
$0.0
(1.00%)
1.75%
$0.0
(1.00%)
2.00%
$0.0
(1.00%)
2.25%
$0.1
(1.00%)
2.50%
$0.1
10.0%
15.0%
15.0%
20.0%
40.0%
111.8
(11.2)
$100.6
100.6
(16.8)
$83.8
83.8
(16.8)
$67.1
67.1
(22.4)
$44.7
44.7
(44.7)
$0.0
3.25%
5.75%
$6.1
3.25%
6.00%
$5.5
3.25%
6.25%
$4.7
3.00%
6.25%
$3.5
2.75%
6.25%
$1.4
139.7
0.0
6.9
$146.6
146.6
0.0
7.2
$153.8
153.8
0.0
7.6
$161.4
161.4
0.0
0.0
$161.4
161.4
0.0
0.0
$161.4
60.0%
40.0%
8.0%
60.0%
40.0%
8.0%
60.0%
40.0%
8.0%
0.0%
100.0%
8.0%
0.0%
100.0%
8.0%
6.9
4.6
$11.5
7.2
4.8
$12.0
7.6
5.0
$12.6
0.0
12.9
$12.9
0.0
12.9
$12.9
$111.8
Spread to LIBOR
Interest Rate (LIBOR + Spread)
Annual Interest Expense
Mezzanine Debt
Amount Outstanding - Beginning
Scheduled Repayments
PIK Amount
Amount Outstanding - Ending
$139.7
Page 15 of 23
7/24/2014 7:19 AM
2012
2013
Projected
2014
2015
2016
2.50%
5.18 x
2.75%
4.34 x
3.00%
3.48 x
3.25%
2.74 x
3.50%
1.93 x
27.7
(11.2)
(2.1)
14.4
26.3
(16.8)
(2.1)
7.4
27.9
(16.8)
(2.1)
9.0
26.1
(22.4)
(2.1)
1.6
33.9
(44.7)
(2.1)
(13.0)
27.9
(14.4)
$13.5
13.5
(7.4)
$6.1
6.1
(6.1)
$0.0
0.0
0.0
$0.0
0.0
8.5
$8.5
3.25%
5.75%
$1.2
3.25%
6.00%
$0.6
3.25%
6.25%
$0.2
3.00%
6.25%
$0.0
2.75%
6.25%
$0.3
48.0
40.0
47.2
40.0
50.7
40.0
54.3
40.0
58.2
40.0
62.9
40.0
$12.1
12.1
14.4
0.0
$26.5
26.5
7.4
0.0
$33.9
33.9
6.1
0.0
$40.0
40.0
0.0
0.0
$40.0
40.0
(8.5)
0.0
$31.5
0.50%
$0.1
0.50%
$0.2
0.50%
$0.2
0.50%
$0.2
0.50%
$0.2
12.0
6.9
$18.8
11.1
7.2
$18.3
10.1
7.6
$17.7
16.5
0.0
$16.5
14.7
0.0
$14.7
5.00 x
$27.9
Spread to LIBOR
Interest Rate (LIBOR + Spread)
Annual Interest Expense
Revolver (Undrawn Amount)
Margining of Assets Formula Amount
Maximum Revolver Amount Available
Undrawn Amount at Beginning
Repayments / (Drawings)
Less: Reduction in Maximum Amount Available
Amount Available - Ending
Interest Rate on Undrawn Amount
Interest Expense (Stand-By Fee) on Undrawn Amount
Total Interest Expense
Cash Interest
PIK Interest
Net Interest Expense
Page 16 of 23
7/24/2014 7:19 AM
$25.0
Dividend Rate
Preferred Dividend
Common Shares
Amount Outstanding - Beginning
New Issuance / (Redemption)
Amount Outstanding - Ending
$70.2
Retained Earnings
Amount Outstanding - Beginning
Net Income
Preferred Dividend
Common Dividend
Amount Outstanding - Ending
($11.4)
Page 17 of 23
2012
2013
Projected
2014
2015
2016
25.0
0.0
$25.0
25.0
0.0
$25.0
25.0
0.0
$25.0
25.0
0.0
$25.0
25.0
0.0
$25.0
8.5%
$2.1
8.5%
$2.1
8.5%
$2.1
8.5%
$2.1
8.5%
$2.1
70.2
0.0
$70.2
70.2
0.0
$70.2
70.2
0.0
$70.2
70.2
0.0
$70.2
70.2
0.0
$70.2
0.0%
7.6
$0.0
0.0%
11.4
$0.0
0.0%
17.5
$0.0
0.0%
24.2
$0.0
0.0%
33.1
$0.0
(11.4)
9.7
(2.1)
0.0
($3.8)
(3.8)
13.5
(2.1)
0.0
$7.6
7.6
19.7
(2.1)
0.0
$25.1
25.1
26.3
(2.1)
0.0
$49.3
49.3
35.3
(2.1)
0.0
$82.4
7/24/2014 7:19 AM
2012
2013
Projected
2014
2015
2016
(C$ MM)
$0.0
27.9
111.8
139.7
279.4
279.4
83.8
363.3
$0.0
13.5
100.6
146.6
260.7
260.7
91.4
352.1
$0.0
6.1
83.8
153.8
243.7
243.7
102.8
346.5
$2.9
0.0
67.1
161.4
228.4
225.5
120.3
345.8
$4.5
0.0
44.7
161.4
206.1
201.5
144.5
346.1
$0.0
8.5
0.0
161.4
169.8
169.8
177.6
347.5
(C$ MM)
$55.9
$50.3
18.8
14.2
$56.2
18.3
15.3
$65.6
17.7
15.7
$75.3
16.5
16.0
$87.9
14.7
16.4
2.50 x
2.25 x
2.00 x
1.75 x
1.50 x
1.25 x
2.50 x
2.27 x
($0.4)
1.60 x
$11.2
1.02 x
$27.3
0.59 x
$45.5
0.10 x
$81.2
1.50 x
1.50 x
1.50 x
1.50 x
1.50 x
1.50 x
2.67 x
$22.0
3.07 x
$28.7
3.72 x
$39.1
4.56 x
$50.5
5.99 x
$65.9
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
Covenant
Covenant
EBITDA / Interest
EBITDA Cushion
Other Ratios
Mezzanine Debt / EBITDA
2.50 x
2.91 x
2.74 x
2.46 x
2.14 x
1.83 x
5.00 x
5.18 x
4.34 x
3.48 x
2.74 x
1.93 x
74.0%
70.3%
65.2%
58.2%
48.9%
1.92 x
2.23 x
2.83 x
3.59 x
4.87 x
Page 18 of 23
7/24/2014 7:19 AM
EBITDA
Assumed Exit Multiple
Enterprise Value
(C$ MM)
(C$ MM)
(%)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
IRR
(41.3%)
17.1%
35.9%
39.1%
39.9%
Value
Added
($27.0)
$24.3
$98.4
$179.1
$284.73
KKZ
Investment
($65.2)
($65.2)
($65.2)
($65.2)
($65.2)
Page 19 of 23
2012
2013
Projected
2014
2015
2016
$50.3
6.5 x
326.9
$56.2
6.5 x
365.1
$65.6
6.5 x
426.7
$75.3
6.5 x
489.6
$87.9
6.5 x
571.6
260.7
25.0
41.2
243.7
25.0
96.4
225.5
25.0
176.2
201.5
25.0
263.0
169.8
25.0
376.8
92.9%
38.3
92.9%
89.5
92.9%
163.7
92.9%
244.3
92.9%
350.0
2015
2016
2012
$38.3
$0
$0
$0
$0
$163.7
$0
$0
$244.3
$0
$350.0
7/24/2014 7:19 AM
35.0%
2012
2013
Projected
2014
2015
2016
$33.8
$39.1
$47.9
$57.0
$68.9
16.5
26.6
23.7
17.1
24.9
31.3
17.7
23.5
42.2
18.4
22.3
53.0
19.0
21.4
66.5
18.5
18.5
5.2
0.0
0.0
31.3
0.0
0.0
42.2
0.0
0.0
53.0
0.0
0.0
66.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
$5.2
$31.3
$42.2
$53.0
$66.5
11.8
13.7
16.8
19.9
24.1
1.8
10.0
11.8
11.0
2.7
13.7
14.8
2.0
16.8
18.6
1.4
19.9
23.3
0.8
24.1
CCA Schedule
Blended CCA Rate
2012
2013
2014
2015
2016
UCC Beginning
Plus: New Capex
1/2 of New Capex
UCC After New Capex (1/2 Year)
Less: CCA Available and Used
UCC Ending (C + D - E)
15.0%
170.5
14.2
7.1
177.6
26.6
$158.1
C
D
Page 20 of 23
158.1
15.3
7.7
165.7
24.9
$148.5
148.5
15.7
7.8
156.3
23.5
$140.7
140.7
16.0
8.0
148.7
22.3
$134.4
134.4
16.4
8.2
142.6
21.4
$129.4
7/24/2014 7:19 AM
2012
2013
50.3
(1.8)
3.6
(14.2)
37.9
56.2
(11.0)
(3.5)
(15.3)
26.4
9.7
16.5
5.2
18.8
(1.8)
3.6
(14.2)
37.9
13.5
17.1
7.3
18.3
(11.0)
(3.5)
(15.3)
26.4
Projected
2014
2015
2016
Term
65.6
(14.8)
(3.6)
(15.7)
31.6
75.3
(18.6)
(3.9)
(16.0)
36.8
87.9
(23.3)
(4.9)
(16.4)
43.4
79.9
(22.1)
0.0
(16.7)
41.0
19.7
17.7
2.2
17.7
(6.4)
(3.6)
(15.7)
31.6
26.3
18.4
1.4
16.5
(5.8)
(3.9)
(16.0)
36.8
35.3
19.0
0.8
14.7
(5.1)
(4.9)
(16.4)
43.4
41.0
16.7
0.0
0.0
0.0
0.0
(16.7)
41.0
0.000
Page 21 of 23
0.000
0.000
0.000
0.000
0.000
7/24/2014 7:19 AM
WACC
1.5%
11.0%
11.5%
12.0%
12.5%
PV of Cash Flows
PV of Terminal Year
Enterprise Value
136
270
$406
7.3 x
PV of Cash Flows
PV of Terminal Year
Enterprise Value
134
251
$386
6.9 x
PV of Cash Flows
PV of Terminal Year
Enterprise Value
Multiple of 2011F EBITDA
133
235
$367
PV of Cash Flows
PV of Terminal Year
Enterprise Value
131
220
$351
6.3 x
2.0%
33%
67%
100%
136
285
$421
32%
68%
100%
7.5 x
35%
65%
100%
134
265
$399
6.6 x
133
246
$379
34%
66%
100%
131
230
$361
6.5 x
Page 22 of 23
134
279
$414
35%
65%
100%
133
259
$392
32%
68%
100%
131
242
$373
6.7 x
30%
70%
100%
134
296
$430
31%
69%
100%
7.7 x
34%
66%
100%
7.0 x
36%
64%
100%
136
321
$456
8.2 x
7.4 x
6.8 x
37%
63%
100%
31%
69%
100%
7.8 x
7.1 x
36%
64%
100%
136
302
$438
3.0%
133
274
$407
33%
67%
100%
7.3 x
35%
65%
100%
131
254
$386
34%
66%
100%
6.9 x
7/24/2014 7:19 AM
WACC
Terminal EBITDA Multiple
12.0%
6.5 x
$133
PV of Terminal Year
$278
Enterprise Value
$411
W
A
C
C
3.1%
$411
5.5 x
6.0 x
6.5 x
7.0 x
7.5 x
11.0%
$383
$406
$428
$451
$473
11.5%
$376
$398
$419
$441
$463
12.0%
$368
$390
$411
$433
$454
12.5%
$361
$382
$403
$424
$445
13.0%
$354
$375
$395
$415
$436
W
A
C
C
3.1%
5.5 x
6.0 x
6.5 x
7.0 x
7.5 x
11.0%
0.6%
1.5%
2.2%
2.9%
3.4%
11.5%
1.1%
2.0%
2.7%
3.3%
3.9%
12.0%
1.5%
2.4%
3.1%
3.8%
4.3%
12.5%
2.0%
2.9%
3.6%
4.2%
4.8%
13.0%
2.4%
3.3%
4.1%
4.7%
5.3%
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