Institutional Clients Group | General Industrials & Financial Sponsors

July 2019

Prometheus acquisition

Atlas Gaming
 DCF model snapshot
Valuation of Prometheus Assuming a tax rate of 30%, WACC of 9.0% and a terminal growth rate of 2.5%.

Valuation summary
Assumptions

1 2 3 4 5 Revenue growth = 30% (2018) decreasing to 10%(2020)

Terminal
A$m, Dec y/e   CY19F CY20F CY21F CY22F CY23F value D&A grown at 5% from 2019 onward.
Revenue A$m 378 435 470 508 551
Capex assumed to be equal to D&A
EBITDA A$m 94 109 117 127 138
% margin % 25.0% 25.0% 25.0% 25.0% 25.0% NNWC assumed to be in line with % of sales.
Less D&A A$m (4) (4) (4) (5) (5)
EBIT A$m 91 105 113 123 133 WACC % 9.0%
Less tax on EBIT A$m (29) (33) (36) (39) (43)  
Terminal growth rate % 2.5%
NOPAT A$m 62 71 77 83 90
% margin % 16.3% 16.3% 16.4% 16.4% 16.4%   EBITDA margin % 25%
Add D&A A$m 4 4 4 5 5
Less capex A$m (4) (4) (4) (5) (5) Tax Rate % % 32.0%
Less Δ NWC A$m (4) (5) (5) (6) (6)  
Unlevered FCF A$m 57 66 72 77 84
Year remaining n 0.6 1.0 1.0 1.0 1.0
Valuation summary
Unlevered FCF 1,182
(timed) A$m 35 66 72 77 84 1,325
Timing n 0.31 1.31 2.31 3.31 4.31 4.31 921
Discount factor n 0.97 0.89 0.82 0.75 0.69 0.69
DCF A$m 34 59 59 58 58 914 660

Valuation    
Discounted cash
flows A$m 268
Discounted TV A$m 914
Enterprise value A$m 1,182
DCF Transaction / trading Blended valuation
comps
CY18 EV / EBITDA x 14.3x