本文发表在 rolia.net 枫下论坛The T&T Acquisition
Acquiring T&T Supermarkets was a wise move by Loblaw, but now the hard part begins.
T&T is a relatively upscale Asian supermarket chain, whose newer stores are aimed as much at non-Asians as at Asians. On a sales-per-square foot basis, these are hugely productive units. We believe that Loblaw paid about 8.8x EBITDA and will have about $35 million of synergies (mostly D.C.’s and head offices) over about 24 months, reducing the net multiple to just 3.7x – a great net price.
By our math, T&T adds about 7-cents per share to Loblaw’s F2010 earnings. We are assuming that Loblaw adds at least two T&T stores in F2010, and then accelerates after that, doubling the network over five years.
One of the hidden gems of T&T is the commissary operation in Toronto and Vancouver, which produces the tremendous HMR product in T&T stores. On the conference call, Loblaw mentioned that its own HMR business was dismal this year, chalking it up to consumers not being interested in the category right now. We believe that Loblaw’s HMR business could benefit hugely from T&T’s production and programs. Another benefit is T&T’s unique and innovative
worldwide supplier base, which Loblaw could access for its core conventional and
discount stores.
Although the acquisition is an intelligent acknowledgement of Canada’s critical Asian community, there will be two large challenges for Loblaw:
1, Maintaining the unique culture and character of T&T stores.
2, Aggressively rolling out new T&T stores without cannibalizing its existing business.
Exhibit 3. Estimating The Multiple Paid for T&T
LTM
# of stores 17
Sales 514.0
est EBITDA margin 5.0%
EBITDA 25.7
Implied EV/EBITDA 8.8x
Total synergies 35.0
EV/EBITDA, post-synergies 3.7x
Source: Company reports and CIBC World Markets Inc.更多精彩文章及讨论，请光临枫下论坛 rolia.net
Acquiring T&T Supermarkets was a wise move by Loblaw, but now the hard part begins.
T&T is a relatively upscale Asian supermarket chain, whose newer stores are aimed as much at non-Asians as at Asians. On a sales-per-square foot basis, these are hugely productive units. We believe that Loblaw paid about 8.8x EBITDA and will have about $35 million of synergies (mostly D.C.’s and head offices) over about 24 months, reducing the net multiple to just 3.7x – a great net price.
By our math, T&T adds about 7-cents per share to Loblaw’s F2010 earnings. We are assuming that Loblaw adds at least two T&T stores in F2010, and then accelerates after that, doubling the network over five years.
One of the hidden gems of T&T is the commissary operation in Toronto and Vancouver, which produces the tremendous HMR product in T&T stores. On the conference call, Loblaw mentioned that its own HMR business was dismal this year, chalking it up to consumers not being interested in the category right now. We believe that Loblaw’s HMR business could benefit hugely from T&T’s production and programs. Another benefit is T&T’s unique and innovative
worldwide supplier base, which Loblaw could access for its core conventional and
discount stores.
Although the acquisition is an intelligent acknowledgement of Canada’s critical Asian community, there will be two large challenges for Loblaw:
1, Maintaining the unique culture and character of T&T stores.
2, Aggressively rolling out new T&T stores without cannibalizing its existing business.
Exhibit 3. Estimating The Multiple Paid for T&T
LTM
# of stores 17
Sales 514.0
est EBITDA margin 5.0%
EBITDA 25.7
Implied EV/EBITDA 8.8x
Total synergies 35.0
EV/EBITDA, post-synergies 3.7x
Source: Company reports and CIBC World Markets Inc.更多精彩文章及讨论，请光临枫下论坛 rolia.net