Macy’s, Inc., together with its subsidiaries, operates stores, websites, and mobile applications offering a range of women’s, men’s, and children’s apparel. As of January 4, 2017, it operated approximately 880 stores in the United States, the District of Columbia, Guam, and Puerto Rico under the Macy’s, Bloomingdales, Bloomingdale’s Outlet, Macy’s Backstage, and Bluemercury brands, as well as Websites, including macys.com, bloomingdales.com, and bluemercury.com.
Key Current Stats
| Enterprise Value | $16.6B |
| Market Cap | $9.97B |
| Current Share Price | $ 31.38 |
| Revenue | $26.15B |
| EBITDA | $3.0B |
| Total Debt | $7.5B |
| Total Cash | $457M |
| Cap Ex | $800M |
| EV/EBITDA | 5.53 |
| Leverage Ratio | 2.49 |
Macy’s stock performance hindered more by sector and industry head winds, than company performance. Despite the challenges of the industry Macy’s still presents an interesting buyout opportunity.
- Strong Brand recognition
- Desirable Real Estate Assets
- Company has significant debt capacity
- Multiple expansion is definitely possible
- Macy’s is not Sears
A transaction of this size is doable on paper, from a debt capacity, interest coverage, and leverage standpoint, but the real challenge of this deal is the large amount of capital required to execute the transaction.
Using conservative assumptions we get the following:
- Total Purchase Price Range $21.1B to $21.7B
- Per Share $46.06 to $48.06
- Premium Paid 47% to 53%