Evercore Investment Banking Pitch Book
For
Reference Only
Preliminary Valuation of SIRE Common Units
Valuation Methodologies
Evercore utilized the following methodologies to analyze the value of SIRE's Common Units:
Methodology
Discounted
Cash Flow
Analysis
Peer Group
Trading
Analysis
Precedent M&A
Transaction
Analysis
Discounted
Distributions
Analysis
Premiums Paid
Analysis
EVERCORE
Description
Values SIRE Common Units based on the concepts of the
time value of money
Using management's projections, Evercore:
► Utilized varying WACC discount rates and terminal
values to derive valuation ranges for the SIRE
Common Units
► Cash flows were discounted using WACC given
allocated EBITDA-based cash flows
► Calculated terminal values based on a range of
multiples of EBITDA as well as assumed perpetuity
growth rates
Values SIRE Common Units based on peer group's
current market enterprise value multiples of relevant
EBITDA
Peer group selected based on assets similar to those
owned by SIRE
Values SIRE Common Units based on transactions
involving assets and businesses similar to those owned
by SIRE
Values SIRE Common Units based on the present value
of the future cash distributions to SIRE Common
Unitholders
Implied value of SIRE Common Units based on historical
premiums paid in selected relevant cash midstream
mergers
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Confidential - Preliminary and Subject to Change
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Metrics / Assumptions
Discounted the projected cash flows to assumed effective
date of December 31, 2022
WACC based on the Capital Asset Pricing Model ("CAPM")
Unitholder effective tax rate of 29.6% (80.0% of 37.0% top
bracket) from 2023E to 2025E and 37.0% thereafter
For the terminal value, tax depreciation assumed to equal
maintenance capital expenditures
EBITDA exit multiple of 5.5x to 8.0x and a perpetuity growth
rate of 0.5% to 1.5%
■ Enterprise value / EBITDA multiples applied to 2022E, 2023E
and 2024E Adjusted EBITDA
Transaction value / EBITDA multiples applied to 2023E
EBITDA
Discounted projected distributions to assumed effective date
of December 31, 2022
Terminal yield range of 8.0% to 12.0%
► Cost of equity of 10.0% to 12.0% based on CAPM
Median 1-Day and 30-Day premiums paid applied to relevant
equity prices
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