Beruflich Dokumente
Kultur Dokumente
Team B-ACIIC
Please note that none of the authors in this
pitch have any long or short positions on ACQ
CONTACT INFORMATION
Natalia Lazarevic nlazarevic17@schulich.yorku.ca
Christian Avolio cavolio.hba2016@ivey.ca
Darren Viegas viegasd@mcmaster.ca
Ruohan Chen chen3890@mylaurier.ca
Joshua Rho rho.josh@gmail.com
Andre Luk andre.luk@queensu.ca
Ben Liu 12yfyl@queensu.ca
Michael Saskin michaelsaskin@gmail.com
Krishna Aggarwal agga7870@mylaurier.ca
Parts and
Servicing
Original
Equipment
Manufacturer
(OEM)
4.1%
4.0%
4.2%
$80
$70
3.5%
3.4%
3.0%
$50
$40
2.9%
51-53
31
22
22
23
24
25
2008
2009
2010
2011
2012
$30
2.4%
2.0%
48
130% increase in
dealerships since 2008
$60
2.5%
Consumer
Financing and
Insurance
EBITDA PROFILE
3.0%
AUTO CANADA
$20
1.9%
$10
1.5%
$0
2008
2009
2010
2011
EBITDA
2012
Margin
2013
LTM
2013
Current
By May
2015
ACIIC
BUSINESS SEGMENTS
17.5%
Based on dealerships
owned for at least 2 years
13.9%
10.9%
8.0%
4.1%
-2.8%
2008
-7.8%
2009
2011
2010
2011
2012
2013
LTM
New Vehicles
2012
Used Vehicles
2013
Parts & Servicing
LTM
Finance & Insurance
ACQ is geographically diversified, and its business founded on four revenue streams
Sources: ACQ Investor Relations
ACIIC
Trading History
PRICE VOLUME ANALYSIS
SUMMARY STATISTICS
Volume
1,200
$100
$90
1,000
Appointment of
CFO
$80
Capitalization
Share Price
($)
Shares
($)
Market Cap
Add: Debt
($)
Add: Preferred Shares
Add: Minority Interest
Less: Cash
($)
Less: Investments
($)
Enterprise Value
41.6
24.5 M
960.4
119.9
N/A
N/A
35M
N/A
1.6B
$70
800
Market Data
Closing of Equity
Financing and
Secondary
Offering
$60
600
$50
$40
400
$30
$20
200
$10
3/13/2014
52 Week Low
52 Week High
Avg Vol
5/13/2014
7/13/2014
9/13/2014
11/13/2014
1/13/2015
91.72
31.32
152,368
Trading Multiples
EV/Revenue
EV/EBITDA
P/E
P/B
P/Sales
Analysts Estimates
Annual EPS
Quarterly EPS
Mean Recommendation
PEG Ratio
19.9X
19.5x
2.46x
.47x
2.3
0.56
2
2.3
$0
3/13/2015
ACIIC
Recent Events
OVERVIEW
Lakewood Chevrolet
Acquisition in Edmonton
November 17, 2014: Announced approval from GM Canada to purchase an 80% non-voting equity interest
in Bridges Chevrolet Buick GMC located in North Battleford, Saskatchewan
The franchise retailed 396 new and 387 used vehicles in 2013
November 5, 2014: Announced approval from BMW Canada to purchase an 85% interest in the assets
(including land and building) of Auto Boulevard St. Martin Inc. in Laval, Quebec
The franchises retailed 2,208 new and 680 used vehicles in 2013
October 20, 2014: Announced approval from Chrysler Canada to purchase Toronto Dodge Chrysler
located in Toronto, Ontario
The franchise retailed 615 new and 199 used vehicles in 2013
August 19, 2014: Announced approval from General Motors of Canada to purchase a 75% non-voting
equity interest in the shares of Lakewood Chevrolet located in Edmonton, Alberta
The franchise retailed 659 new and 343 used vehicles in 2013
August 13, 2014: Announced approval from Chrysler Canada to purchase Tower Chrysler located in
Calgary, Alberta
The franchise retailed 889 new and 380 used vehicles in 2013
Consistent demand growth and acquisitions will provide tailwinds for Auto Canadas growth
Sources: ACQ Investor Relations
ACIIC
Increased Acquisition
Guidance
The company issued 2,565,000 common shares from treasury for gross proceeds of $200 million
CAG and its subsidiaries sold, with the full exercise of the over-allotment option, an aggregate of
2,598,500 common shares for gross proceeds of $203 million
July 4, 2014: Confirmed completion of the acquisition of six dealerships and one exclusive right to build and
operate a Nissan motor vehicle dealership on a designated property in Southeast Calgary, from the Hyatt
Automotive Group Inc. or its affiliates.
The Hyatt Dealerships are known by their trade names: Hyatt Mitsubishi, Fish Creek Nissan,
Calgary Hyundai, Northland Volkswagen, Hyatt Infiniti and Crowfoot Hyundai.
June 18, 2014: Announced approval from Chrysler Canada to purchase Dodge City located in Saskatoon,
Saskatchewan
The franchise retailed 1,056 new and 841 used vehicles in 2013
This is in addition to the purchase agreements for eight dealerships announced April 28,2014
June 5, 2014: Announced extension of Pat Priestners employment agreement to May 31, 2019
Appointment of CFO
July 11, 2014: Announced closing of equity financing and secondary offering
Previously VP and CFO of K-Bro Linen Systems and VP Finance, Administration & Tax with Stuart
Olson Construction Group
Consistent demand growth and acquisitions will provide tailwinds for Auto Canadas growth
Sources: ACQ Investor Relations
ACIIC
Market Conditions
Public ownership evolving in Canada, and improving vehicle sales in 2014
OVERVIEW
In 2014 Light Vehicles sales grew by 6.1% YoY with growth lead by
Porsche, Nissan, Land Rover, Jaguar and Infinity
AUTO RETAILING
30%
100
25%
90
80
20%
60
10%
50
5%
40
30
0%
20
-5%
10
-10%
Jan, 2014
Apr, 2014
Ontario
Saskatchewan
Jul, 2014
Alberta
Oct, 2014
Rest of Canada
Jan, 2015
WCS (US$/bbl)
(US$/bbl)
70
15%
Market Conditions
Significant consolidation opportunities exist
OVERVIEW
3,500
dealerships in
Canada
2,450 of them
retiring
858 possible
targets
More than 70% dealers are looking to retire, out of which 30-40%
estimate the sale to an outside buyer as a realistic exit opportunity
50
Western Canada
Ontario
Quebec
40
30
20
10
0
AutoCanada
Go Auto
Murray
Jim Pattison
Wheaton
AutoPlanet
Rafih
Car Nation
Myers
ACQUISITION TARGETS
ANNUAL ACQUISITIONS
Metric
Net Debt/EBITDA
Interest Coverage Ratio
Working Capital
Metric
0.75X
7.15X
45M
48
52
31
22
22
23
24
26
17
0
2006
0
2009
1
2010
1
2011
2
2012
5
2013
4
Current
2015
# of Acquisitions
ACIIC
OEM typically grants a single owner the right to sell its new
vehicles in a defined geographic area
Manufacturers typically do not plan to have more dealerships in an
area than the market can support
Rank
OEM
1
2
3
4
5
6
7
8
9
10
Chrystler
Honda
Nissan
GM
Ford
Subaru
Volkswagon
Toyota
Acura
Mercedes
6.7%
10.4%
11.3%
3.6%
2.7%
18.6%
6.0%
1.4%
10.8%
5.0%
ACQ
Dealerships
14.8%
8.3%
4.7%
13.5%
16.3%
2.1%
3.6%
10.3%
1.1%
2.0%
11
3
6
1
5
-
Rank
Province
1 Ontario
2 Alberta
3 BC
4 Manitoba
5 Nova Scotia
6 Saskatchewan
7 Newfoundland
8 New Brunswick
9 PEI
10 Quebec
-
27,556
17,334
8,037
4,809
3,854
2,757
2,149
1,511
427
997
45.0%
7.3%
4.7%
9.7%
8.0%
5.0%
6.5%
3.9%
6.0%
-0.2%
ACQ
Dealerships
37.0%
14.7%
10.3%
3.1%
3.0%
3.3%
2.0%
2.3%
0.4%
23.8%
3
13
10
4
1
2
1
1
Considering that the company owns some of the most valuable dealership locations in Canada and has a strong balance
sheet it should deserve a higher valuation due to the lower investment risk
Sources: ACQ Investor Relations
ACIIC
ACQ Growth
Strategy
5.6%
10.9%
Brand marketing
29.5%
30.0%
8.1%
32.0%
New Vehicles
Used Vehicles
ABSORPTION RATE
91%
89%
88%
87%
86%
2009
2010
86%
2011
2012
2013
2014 LTM
ACIIC
Pat Priestner
Tom Orysiuk
Steve Rose
Chris Burros
Erin Oor
Executive Chairman
President and CEO
Senior VP and COO
VP and CFO
VP of Corp Dev
ACIIC
Risks
LACK OF DIVERSITY
CHRYSLER AS A % OF REVENUE
RELIANCE ON CHRYSLER
44.81%
21.43%
16.34%
ACQ has higher margins on the SUVs and light trucks it sells so a
demand shift towards more economical cars would impact profit
margins
AB
Edmonton
BC
Nationally
ACIIC
Catalysts
OEM CONSTRAINTS
$120
$100
$80
$60
$40
Briges
Chevrolet
BMW
Laval/MINI
Laval
Toronto
Dodge
New
Lakewood
Chevrolet
Used
Tower
Chrysler
Dodge City
$20
$0
Street Coverage
ANALYST PRICE TARGETS
Company
RBC
CIBC
Cannaccord
GMP
Clarus
Cormark
Median
Mean
Current Share Price
Implied Upside
ANALYST RECOMMENDATIONS
INVESTMENT HIGHLIGHTS
Price Target
$70.00 AutoNation
$71.00
$66.00
$90.00
Asbury
$78.00
$70.00
70.50
74.17 Penske Auto
41.65
78.1%
Sonic Auto
AutoCanada
Buy
Hold
Sell
ACIIC
Comparables Summary
17.8x
15.6x
11.2x
Asbury
23.8x
16.50%
7.00%
0.3x
9.40%
-
AutoNation
13.1x
15.60%
7.60%
0.3x
7.10%
-
12.2x
13.2x
13.8x
EV / 2014 EBITDA
EV/2014 LTM
LTM Gross Margin
LTM SSS Growth
Net Debt/LTM EBITDA
NTM Revenue Growth
Dividend Yield
AutoCanada
18.5x
48.30%
17.30%
0.5x
54.30%
2.35%
Carmax
14.8x
15.20%
12.00%
0.9x
10.90%
-
Group 1
15.4x
15.30%
21.80%
0.2x
42.90%
0.91%
Lithia
14.4x
15.00%
12.10%
0.3x
11.90%
0.68%
Penske
13.1x
14.60%
11.70%
0.2x
6.90%
2.03%
17.7x
17.7x
19.9x
17.5x
15.5x
13.0x
EV / 2014 EBITDA
ACIIC
Football Field
Note, a football field is a visual
diagram used to illustrate and
benchmark the bear/bull scenarios
of each valuation method observed
against share price performance. By
doing so we can see that ACQ is
trading on the low end of valuation
estimates.
$91.72
$70.00
$66.41
$64.49
$51.00
$55.89
$48.00
$38.00
$29.43
DCF Analysis
Premium (30%-50%)
Analyst Range
Comparable Companies
$31.32
52 Week Range
ACIIC
Tornado Schedule
Metric
Benchmark
Change
Impact on EV
Terminal Multiple
10.0x
-1.0x / 1.0x
WACC
9.00%
-% / %
2.50%
-% / %
Tax Rate
0.26
-% / %
Chart Data
Terminal Multiple
WACC
Long Term Grow th
Tax Rate
Base EV
788.58
1,068.70
1,068.70
1,068.70
Rank
2
4
1
3
Sensitivity Range
Min
Max
(1.0x)
1.0x
(1.0%)
1.0%
(1.0%)
1.0%
(1.0%)
1.0%
($13)
$13
($107)
$146
($6)
($52)
$6
$52
EV
Min
736.56
1,062.69
961.99
1,055.58
Tornado Range
Max
840.60
1,074.96
1,214.22
1,081.39
Min
($52)
($6)
($107)
($13)
Max
$52
$6
$146
$13
Tornado schedule suggests that SSS growth has the greatest positive net effect on EV
Sources: ACQ Investor Relations
ACIIC
Model Summary
Cost of Capital
Perpetuity Grow th
Terminal Value
PV of Cash Flow s
PV of Terminal Value
Enterprise Value
Less: Debt
Less: Pref Shares
Less: Minority Int.
Add: Cash
Equity Value
Shares Outstanding
Im plied per Share
TV as a % of Total
Low
11.00%
2.00%
851,850.47
268,362.97
532,610.79
$800,973.76
268
Base
9.00%
2.50%
1,179,485.26
268,362.97
800,337.71
$1,068,700.67
268
Bull
7.00%
3.00%
1,916,663.55
268,362.97
1,413,575.09
$1,681,938.06
268
52
$800,757.76
24103.67
$33.22
106%
52
$1,068,484.67
24103.67
$44.33
110%
52
$1,681,722.06
24103.67
$69.77
114%
Low
11.00%
8.0x
613,332.34
268,362.97
383,479.77
$651,842.74
268
Base
9.00%
10.0x
766,665.42
268,362.97
520,219.51
$788,582.48
268
Bull
7.00%
12.0x
919,998.50
268,362.97
678,516.04
$946,879.01
268
52
$651,626.74
24103.67
$27.03
94%
52
$788,366.48
24103.67
$32.71
97%
52
$946,663.01
24103.67
$39.27
97%
3/23/2015
2014
C$
9.00%
10.0x
2.50%
26.00%
Tax Rate
Shares Outstanding
Cost of Capital
Terminal Multiple
Terminal Value
PV of Cash Flow s
PV of Terminal Value
Enterprise Value
Less: Debt
Less: Pref Shares
Less: Minority Int.
Add: Cash
Equity Value
Shares Outstanding
Im plied per Share
TV as a % of Total
Revenue Projections
Revenue Schedule
2011
2012
2013
Total Revenue
Organic Growth (%)
6.99%
Less: Wholly-Ow ned Revenue
Calgary, Alberta (Courtesy Chrysler Dodge)
Stub period (July 1st, 2013)
Grand Prairie, Alberta (Grand Prairie Volksw agen)
Stub period (January 4th, 2013)
Winnipeg, Manitoba (St. James Audi)
Stub period (April 1st, 2013)
Winnipeg, Manitoba (St. James Volksw agen)
Stub period (April 1st, 2013)
Winnipeg, Manitoba (Eastern Chrysler Jeep Dodge)
Stub period (April 1st, 2013)
Subtotal
2014
1,409,040
28,973
0.5
57,947
1
33,655
0.75
33,655
0.75
33,655
0.75
187,886
55,220
0.67
27,610
0.33
82,831
270,716
2016
2017
1,507,532
1,612,908
1,725,651
1,846,274
1,975,328
Acquisition Grow th
British Columbia
Alberta
Saskatchew an
Manitoba
Ontario
Other
Total
2.00
1.00
1.00
4.00
3.00
2.00
1.00
2.00
8.00
2.00
3.00
1.00
2.00
8.00
3.00
2.00
1.00
2.00
8.00
3.00
2.00
2.00
7.00
143,839.67
115,893.45
12,854.50
70,396.00
342,983.62
95,893.11
173,840.18
20,707.67
70,396.00
360,836.96
143,839.67
115,893.45
12,854.50
70,396.00
342,983.62
143,839.67
115,893.45
70,396.00
330,129.12
1,671,477.85
1,955,892.00
2,086,487.63
2,189,257.27
2,305,457.30
18.6%
17.0%
6.7%
4.9%
5.3%
Total Revenue
1,138,324
8.42%
Revenue
1,009,326
Less: Dealership investment revenue
Sherw ood Park, Alberta (Sherw ood Park Chevrolet)
Stub period (June 30th, 2012)
Sherw ood Park, Alberta (Sherw ood Buick GMC)
Stub period (June 30th, 2012)
Duncan, British Columbia (Peter Baljet Chevrolet GMC Buick)
Stub period (March 30th, 2013)
Total
-
1,101,902
1,049,922
5.57%
994,551
2018
Organic Revenue
Implied Growth
Adjusted total organic revenue
Adjusted adjusted organic revenue grow th
2015
25,990
0.5
25,990
0.5
51,980
Valuation Summary
1,200
$100
$91.72
$90
1,000
$80
$70
800
$70.00
$66.41
$64.49
$60
$51.00
600
$51.00
$50
$55.89
$40
$48.00
400
$48.00
$30
$38.00
$31.32
$29.43
DCF Analysis
Comparable
Companies
$10
52 Week Range
Assumptions
$20
200
$0
3/13/2014 5/13/2014 7/13/2014 9/13/2014 11/13/2014 1/13/2015 3/13/2015
DCF Analysis
SSS Growth
14.37%
Growth Rate
2%
Revenue/Dealer
$50,523
WACC
9%
Tax Rate
26%
COGS as a % of Rev
83%
Price Target
$51.00
Current Price
$41.65
Annualized Return
Running Case:
19.58%
Base
ACIIC
APPENDIX
Team B-ACIIC
STATISTICS
2010
0.02
3.33
3.17
17.72%
2011
0.04
3.02
2.96
32.57%
2012
0.02
2.68
3.3
19.44%
2013
0.03
2.28
3.25
20.08%
0.045
0.04
0.035
2.5
0.03
0.025
0.02
1.5
3.5
2010
0.74
0.71
0.03
3.52
3.04
17.97%
2011
0.75
0.85
0.06
3.39
3.05
37.67%
2012
0.74
0.79
0.04
2.96
3.14
20.38%
2013
0.74
0.90
0.04
2.74
3.27
24.28%
0.015
0.01
0.5
0.005
2010
2011
Asset Turnover
2012
Equity Multipler
2013
Net Profit Margin
Tax Burden
2010
2011
Interest Burden
EBIT Margin
2012
Asset Turnover
2013
Leverage
ACIIC
$123
$53
$38
$34
$36
-$6
-$11
2010
$66
$64
-$29
2011
2012
2013
2014
2010
TOTAL DEBT
2011
2012
2013
2014
$438
$155
$472
$264 $278
$88
$204 $199
$126 $118
$26
$24
$161
$28
2010
2010
2011
$138
2012
2013
2014
2011
2012
2013
2014
Inventory
ACIIC
Price
Asbury Automotive
$75.35
Autonation
$60.81
Carmax
EV /
LTM EPS
FY1 EPS
FY2 EPS
LTM EBITDA
FY1 EBITDA
FY2 EBITDA
LTM Sales
FY1 Sales
FY2 Sales
$2,075.2
$3,546.0
17.1x
14.8x
13.2x
14.8x
11.2x
10.4x
0.3x
0.3x
0.3x
$6,910.1
$12,053.5
17.3x
15.4x
13.9x
15.4x
12.7x
11.8x
0.3x
0.3x
0.3x
$62.16
$13,052.2
$21,684.3
25.5x
23.8x
21.3x
23.8x
20.1x
19.0x
0.8x
0.9x
0.8x
Group 1 Automotive
$76.81
$1,862.4
$4,292.9
12.7x
11.4x
10.3x
11.4x
11.7x
11.0x
0.2x
0.2x
0.2x
0.91%
Lithia Motors
$88.82
$2,333.7
$4,128.4
17.0x
14.4x
12.8x
14.4x
12.1x
11.0x
0.3x
0.3x
0.3x
0.68%
Penske Automotive
$48.61
$4,389.5
$8,469.1
15.0x
13.1x
12.0x
13.1x
13.2x
12.2x
0.2x
0.2x
0.2x
2.03%
'
'
'
'
17.4x
'
15.5x
'
13.9x
'
15.5x
'
13.5x
'
12.6x
'
0.4x
'
0.4x
'
0.4x
'
1.21%
$42.60
$819.9
$1,285.3
20.0x
18.5x
13.8x
18.5x
17.1x
11.9x
0.3x
0.5x
0.3x
2.35%
Automobile Dealers
Average
AutoCanada
Margins
(US$ millions, except per share data)
Price
Asbury Automotive
$75.35
Autonation
$60.81
Carmax
Revenue Growth
EBITDA Growth
SSS Growth
Net Debt/EBITDA
Gross
EBITDA
LTM
NTM
LTM
NTM
ROE
ROIC
$2,075.2
$3,546.0
7.00%
0.3x
16.50%
5.10%
9.99%
9.40%
14.59%
8.12%
23.86%
9.20%
$6,910.1
$12,053.5
7.60%
0.3x
15.60%
4.80%
9.08%
7.10%
10.71%
5.70%
20.26%
7.10%
$62.16
$13,052.2
$21,684.3
12.00%
0.9x
15.20%
7.20%
12.10%
10.90%
8.51%
16.09%
17.11%
5.08%
Group 1 Automotive
$76.81
$1,862.4
$4,292.9
21.80%
0.2x
15.30%
4.90%
34.56%
42.90%
26.76%
28.10%
8.88%
4.99%
Lithia Motors
$88.82
$2,333.7
$4,128.4
12.10%
0.3x
15.00%
3.30%
18.92%
11.90%
16.38%
12.60%
22.97%
7.41%
Penske Automotive
$48.61
$4,389.5
$8,469.1
11.70%
0.2x
14.60%
3.90%
11.43%
6.90%
19.80%
-7.00%
18.16%
6.19%
'
'
'
'
'
'
'
'
'
'
'
'
'
12.03%
0.4x
15.37%
4.87%
16.01%
14.85%
16.13%
14.12%
18.54%
6.66%
17.30%
0.5x
48.30%
4.83%
42.00%
54.30%
46.60%
61.80%
33.88%
7.62%
Automobile Dealers
Average
AutoCanada
$42.60
P/E LTM
P/E FY1
P/E FY2
EV/EBITDA LTM
EV/EBITDA FY1
EV/EBITDA FY2
Average Implied Share Price
$819.9
Low
12.7x
11.4x
10.3x
11.4x
11.2x
11.0x
$1,285.3
Multiple
Mean
17.4x
15.5x
13.9x
15.5x
13.5x
12.6x
High
25.5x
23.8x
21.3x
23.8x
20.1x
19.0x
Metric
$2.31
$2.50
$3.35
$88.47
$95.71
$137.54
Price/Share
Low
Mean
$29.34 $40.19
$28.50 $38.75
$34.51 $46.57
$20.35 $35.15
$22.94 $31.92
$40.94 $49.92
$29.43 $40.42
High
$58.91
$59.50
$71.36
$65.13
$57.70
$85.85
$66.41
ACIIC
as a % of Revenue 83.00%
2014
$1,671,477.85
18.6%
1,387,326.62
2015
$1,955,892.00
17.0%
1623390.357
Projection Period
2016
$2,086,487.63
6.7%
1731784.733
2017
$2,189,257.27
4.9%
1817083.537
2018
$2,305,457.30
5.3%
1913529.561
as a % of Revenue 13.00%
284,151.23
17.0%
217,292.12
332,501.64
17.0%
254,265.96
354,702.90
17.0%
271,243.39
372,173.74
17.0%
284,603.45
391,927.74
17.0%
299,709.45
66,859.11
4.0%
78,235.68
4.0%
83,459.51
4.0%
87,570.29
4.0%
92,218.29
4.0%
66,859.11
17,383.37
78,235.68
20,341.28
83,459.51
21,699.47
87,570.29
22,768.28
92,218.29
23,976.76
49,475.74
12,382.58
7,537.66
-
57,894.40
13,715.92
8,064.54
-
61,760.03
15,142.46
8,628.25
-
64,802.02
16,668.71
9,231.37
-
68,241.54
18,301.65
9,876.64
-
54,320.67
0.5
0.96
52,029.77
63,545.78
1.5
0.88
55,840.20
68,274.24
2.5
0.81
55,041.55
72,239.36
3.5
0.74
53,429.50
76,666.54
4.5
0.68
52,021.95
2013A
$1,409,040.00
EBITDA
Margin (%)
Depreciation & Amortization
EBIT
Taxes
EBIAT
Plus: Depreciation & Amortization
Less: CAPEX
Less: Change in WC
WACC 9.00%
3/23/2015
2014
C$
9.00%
10.0x
2.50%
26.00%
$1,068.70
8.00%
1074.96
8.50%
1071.80
WACC
9.00%
1068.70
9.50%
1065.66
10.00%
1062.69
$788.58
9.0x
736.56
9.5x
762.57
Terminal Multiple
10.0x
788.58
10.5x
814.59
11.0x
840.60
$1,068.70
1.50%
961.99
2.00%
1011.53
Grow th in Perpetuity
2.50%
1068.70
3.00%
1135.40
3.50%
1214.22
$1,068.48
25.00%
1081.39
25.50%
1074.94
Tax Rate
26.00%
1068.48
26.50%
1062.03
27.00%
1055.58
$44.33
1.5%
2.0%
2.5%
3.0%
3.5%
8.00%
$40.16
$38.36
$38.36
$40.16
$44.59
8.50%
$40.29
$38.50
$38.50
$40.29
$44.72
WACC
9.00%
$40.29
$38.50
$38.50
$40.29
$44.72
9.50%
$40.16
$38.36
$38.36
$40.16
$44.59
10.00%
$39.90
$38.10
$38.10
$39.90
$44.33
$32.71
8.0%
8.5%
9.0%
9.5%
10.0%
9.0x
$31.37
$30.96
$30.55
$30.15
$29.77
9.5x
$30.25
$29.85
$29.47
$29.10
$28.73
Terminal Multiple
10.0x
$30.25
$29.85
$29.47
$29.10
$28.73
10.5x
$31.37
$30.96
$30.55
$30.15
$29.77
11.0x
$33.62
$33.16
$32.71
$32.27
$31.84
Historic Revenue
Revenue Schedule
2011
2012
2013
Total Revenue
Organic Growth (%)
6.99%
Less: Wholly-Ow ned Revenue
Calgary, Alberta (Courtesy Chrysler Dodge)
Stub period (July 1st, 2013)
Grand Prairie, Alberta (Grand Prairie Volksw agen)
Stub period (January 4th, 2013)
Winnipeg, Manitoba (St. James Audi)
Stub period (April 1st, 2013)
Winnipeg, Manitoba (St. James Volksw agen)
Stub period (April 1st, 2013)
Winnipeg, Manitoba (Eastern Chrysler Jeep Dodge)
Stub period (April 1st, 2013)
Subtotal
1,409,040
28,973
0.5
57,947
1
33,655
0.75
33,655
0.75
33,655
0.75
187,886
55,220
0.67
27,610
0.33
82,831
270,716
1,138,324
8.42%
Revenue
1,009,326
Less: Dealership investment revenue
Sherw ood Park, Alberta (Sherw ood Park Chevrolet)
Stub period (June 30th, 2012)
Sherw ood Park, Alberta (Sherw ood Buick GMC)
Stub period (June 30th, 2012)
Duncan, British Columbia (Peter Baljet Chevrolet GMC Buick)
Stub period (March 30th, 2013)
Total
-
1,101,902
1,049,922
5.57%
994,551
25,990
0.5
25,990
0.5
51,980
Geographic Data
Geographic Data
Location of Dealership
British Columbia
Alberta
Saskatchew an
Manitoba
Ontario
Other
Total
# of Dealerships
9
11
0
0
3
5
Location of Dealership
British Columbia
Alberta
Saskatchew an
Manitoba
Ontario
Other
Total
# of Dealerships
9
9
0
0
3
3
Location of Dealership
British Columbia
Alberta
Saskatchew an
Manitoba
Ontario
Other
Total
# of Dealerships
9
9
0
0
3
3
28
24
24
Revenue/Dealership
47,947
57,947
35,198
46,903
187,994
Revenue/Dealership
45,056
51,980
30,703
45,491
173,230
Revenue/Dealership
39,969
45,716
35,906
43,481
165,072
Acquisition Data
Location of Dealerships
British Columbia
Alberta
Saskatchew an
Manitoba
Ontario
Other
Average
Revenue
44,324
51,881
33,936
45,291
EBIT Margin/
Dealership
1,705
1,996
1,306
1,743
Net Income/
Dealership
1,264
1,479
967
1,291
Annual EPS/
Dealership
$0.06
$0.07
$0.05
$0.06