Pershing Square Activist Presentation Deck
Valuation - Conservative Long-Term Model
Conservatively assuming Valeant never makes another acquisition, has modest
organic growth and reduces leverage significantly, the stock is inexpensive
▸ Assumptions:
■ $7.25bn of 2016 EBITDA (assumes ~50% of Philidor profit contribution is lost)
■ 5% organic EBITDA CAGR 2016-2020
De-levers to 3x LTM EBITDA and 6% cost of debt
■ 10% 2020 tax rate
■ Use of excess cash flow to buyback stock at 15x LTM EPS
Results:
■ Valeant de-levers to ~3.5x LTM EBITDA by year end 2016
• We anticipate Valeant will be an investment grade credit at these levels
■2020 EPS of ~$22
High return potential even using conservative modeling assumptions:
2020 EPS
$
Forward Multiple
2019 Value (Year End)
Discounted Present Value (@10%)
Return From Current Share Price ($111.50)
$
22 $
12.0x
$264
180 $
62%
22 $ 22
16.0x
$352
240
116%
14.0x
$308
210 $
89%
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