How to value Heinz by using DCF,comparable companies, and precedent transactionsanalyses based on data below

Harvard case Heinz M&A

Clipboard Font H17 Alignment I X V fx Clipboard Font X V fx D 2014P For Fiscal Year Ending April, (dollars in millions, 2013E 2014P 2016P 2017P 2018 1 x 1 IX 1 1.027 2,057 except per share data) Revenue to grow at 1.3% per year Revenue 1,529 12,141 12,65 13,112 13,744 14,446 EBITDA margin to remain constant at 17.6% per year Capex to increase to $450M in 2013, then decline by 10% per year until 2018 EBITDA 2,057 2,195 2,340 2,453 2,613 2,789 Depreciation expense to grow from 75% of Capex in 2013 to 100% of Capex in 2018 EBIT 1,705 ,834 1,965 2,061 2,202 2,355 asset write downs / Impairments Net working capital needed to fund growth will be $50M in 2013, then $30M per year until 2018 Fully diluted earnings per share $3.58 $3.78 $4.00 $4.2 $4.60 Changes in current assets and liabilities, excluding effects of acquisitions Receivables (Incl proceeds from securitization Discount rate to be 6.5% for every forecast year 5 Prepaid expenses and other current assets 19 Cash provided by operating activities fx Leverage Analysis BERE . POFFER 27 Cash used for investing activities 28 Financing Activities: 29 Net proceeds/(payments) on ST debt 1 Purchase of treasury sto 2 Exercise of stock options 3Acquisition of subsidiary shares from non-controlling interests 5 Other items, net 6 Cash provided by/(used for) financing activities Effect of exchange rate changes on cash and and cash equivalents at end of year Returns Analysis 125.26 2014(E) Campbell 2011 2014(E) 2014(E Paste A A General Mills 138.096 145. 3% Clipboard Font 167.096 154.496 General Mills Groupe Danone 202.7%% 211.7%% Hershey 42.486 43.8%% 116.09% 41.3% 40.1% I X V fx 205.0%% 213.29 223.69 240.29% 35.1%% D 47.46 Smucker 189.09 05.09 254.2% 52.0% 39.9% Cash and cash equivalents pr 28, 2013 Apr 29, 2012 $2,477 Mean 7.8%% 145.2% 139.4% 34 696 162.5% 174.4% 34.26 1,074 Median 165.3% 180.1% 6 Mean 40.16 40.46 9.7%% Receivables (net of allowance) Heinz 192.09 206.4% 238.5% Mediar 39.9% 38.8% 38.0% 38.7% 10.0% Total current assets Heinz 35.5% 34.3% 35.8% 36.0% 17.3% 17.39 17.9 18.26 9.6% 9.7% Property, plant and equipment, net Source: Factse Goodwil and intangible assets Source: FactSet Other non-current assets Short-term debt and current portion of LTD Growth Analysis M fx Announcement Growth Analysis Total current liabilities Long-term debt PNor . 2012 Morningstar foods,LLC Condgra Foods, Inc . BE :8. . . .1. 868 . 1. . . . 8 Deferred income taxes ConAgra Food Non-pension post-retirement benefits 5 General Mills Peet's Coffee & Tea, Inc. 6 Groupe Danone Door: 201 National Boat Packing Co. LLC Other non-current liabilities Total LT debt and other non-current liabilities Del Monte Foods Co. American Italian Pasta Co. alcorp Holdings, Inc. Non-controling interest Capital stock Retained earnings Treasury shares, at cost Accumulated other comprehensive loss Total equity 16 Mean Nestle S.A . Total liabilities and equity eneral Mils, In 19 Heinz 8.6% Condera Foods, Inc. 21 Source: FactSet 22 tree: FactSet