Explain in detail with the analysis of the Exhibit;

Q 1.Figure out the implied enterprise value of Whole Foods based on the industry average EBITDA multiple and the implied share price (Exhibit 7.5 & 7.7).

explain in detail with theory , ASAP
 

Transcribed Image Text:

50% 40% 30% 20% 10% 0% -10% -20% 10% 8% 6% 4% 2% 0% 2003 2004 2005 2006 Whole Foods Market <--- Other Natural & Organic 2003 2004 2005 2006 Company Natural & Organic Whole Foods Market Sprouts Farmers Market The Fresh Market Conventional Grocers Kroger Safeway Supervalu Average Sales Growth Supercenters and Wholesalers Wal-Mart Target Costco 2007 Sales 12.917 2,438 1,512 <---- Conventional Grocer Whole Foods Market ---Other Natural & Organic ********* Supercenters and wholesalers Note: "Other natural & organic" is composed of Sprouts and Fresh Market. "Conventional grocer" is composed of Kroger, Safeway, and SuperValu. "Supercenters and wholesalers" is composed of Wal-Mart and Costco. Source: Company SEC filings. 2003-2013. Average EBITDA Margins 2007 EXHIBIT 7.5 Selected Financial Data for Comparable Companies (in millions of USD, except percentages, ratios, and per share data; financial statement data as of fiscal year 2013) 2008 2009 2010 2011 2012 2013 ---- Conventional Grocer ********* Supercenters and wholesalers EBITDA 1,222 187 138 2008 2009 2010 2011 2012 2013 4,428 98,375 36,139 1,579 17,155 720 Market Cap of Equity 14,481 4,102 1,554 23,679 7,899 1,876 Total Debt Beta 0 304 25 11,311 4,451 2,531 0.70 0.75 0.80 0.70 0.75 1.00 Bond Credit Rating 476,294 35,742 55.245 0.60 251,747 36,806 72,596 6,452 3,999 14,089 0.75 4.985 0.75 105,156 49,257 Data source: Company SEC filings: Deutsche Bank Research: Food Marketing Institute. ΝΑ 88- N.A. BBB BBB B- AA A A+ As expected, the segment's attractiveness sparked increasing competition from both new entrants and 50% 40% 30% 20% 10% 0% -10% -20% 10% 8% 6% 4% 2% 0% 2003 2004 2005 2006 Whole Foods Market <--- Other Natural & Organic 2003 2004 2005 2006 Company Natural & Organic Whole Foods Market Sprouts Farmers Market The Fresh Market Conventional Grocers Kroger Safeway Supervalu Average Sales Growth Supercenters and Wholesalers Wal-Mart Target Costco 2007 Sales 12.917 2,438 1,512 <---- Conventional Grocer Whole Foods Market ---Other Natural & Organic ********* Supercenters and wholesalers Note: "Other natural & organic" is composed of Sprouts and Fresh Market. "Conventional grocer" is composed of Kroger, Safeway, and SuperValu. "Supercenters and wholesalers" is composed of Wal-Mart and Costco. Source: Company SEC filings. 2003-2013. Average EBITDA Margins 2007 EXHIBIT 7.5 Selected Financial Data for Comparable Companies (in millions of USD, except percentages, ratios, and per share data; financial statement data as of fiscal year 2013) 2008 2009 2010 2011 2012 2013 ---- Conventional Grocer ********* Supercenters and wholesalers EBITDA 1,222 187 138 2008 2009 2010 2011 2012 2013 4,428 98,375 36,139 1,579 17,155 720 Market Cap of Equity 14,481 4,102 1,554 23,679 7,899 1,876 Total Debt Beta 0 304 25 11,311 4,451 2,531 0.70 0.75 0.80 0.70 0.75 1.00 Bond Credit Rating 476,294 35,742 55.245 0.60 251,747 36,806 72,596 6,452 3,999 14,089 0.75 4.985 0.75 105,156 49,257 Data source: Company SEC filings: Deutsche Bank Research: Food Marketing Institute. ΝΑ 88- N.A. BBB BBB B- AA A A+ As expected, the segment's attractiveness sparked increasing competition from both new entrants and

Answer rating: 100% (QA)

Answer Q 1 Enterprise Value EV Net debt Market equity ... View the full answer