Citi Investment Banking Pitch Book
Discounted Cash Flow Analysis
Assumptions
• Terminal year perpetuity growth rate of 1.0% to 3.0%
• Cash flows discounted to 12/31/2022 using discount rate range of 17.7% to 19.8%
• Excludes any tax attributes
Total Revenue (Excl. Reimbursements)
EBITDA(¹)
% Growth
(-) Depreciation and Amortization
EBIT
(-) Income Taxes (2)
NOPAT
(+) Depreciation and Amortization
(-) Acq. & Disp. of Property & Equipment, net
(-) Increase in Net Working Capital
Unlevered Free Cash Flow
% Growth
Implied Enterprise Value
(@WACC of 18.8% and Perpetuity Growth Rate of 2.0%)
Unlevered Free Cash Flows (2023E-27E)
PV of Unlevered Free Cash Flows
Terminal Year FCF
Terminal Year Value
Discount Factor
PV of Terminal Value
2023E
$184.2
$4.3
(15.0)
($10.7)
($10.7)
15.0
(16.4)
(1.0)
($13.0)
$43.9
$19.0
18.5
110.4
0.42x
$46.7
Period Ending December 31
2024E
2025E
$65.7
(24.4)
$41.4
33.5
$1.24
$206.9
$18.0
315.7%
(15.5)
$2.5
(0.7)
$1.9
15.5
(8.4)
(2.1)
$6.8
ΝΑ
Discount Rate
17.7%
$222.3
$23.6
18.8%
30.8%
Sensitivity
Implied Equity Value Per Share
19.8%
(15.5)
$8.0
(2.1)
$6.0
15.5
(6.0)
(0.6)
$14.9
117.3%
1.0%
$1.31
1.14
2026E
1.00
$230.7
$25.6
8.6%
Implied Enterprise Value
(-) Net Debt
Implied Equity Value
Fully Diluted Share Count
Implied Equity Value Per Share
Source: AlerisLife Management as of 02/02/2023.
Note: Aleris Life YE 2022 capitalization per ALR management as of February 2023. ALR's net debt balance of $24.4mm excludes cash held by ALR's captive insurance entity per ALR management.
(1) ALR EBITDA burdened by annual Stock-Based Compensation expense of $2.0mm, included in General & Administrative expense.
10 (2)
Marginal tax rate of 26% based on 21% federal income tax rate and 5% state income tax. Analysis assumes no further tax attributes utilized during forecast period.
(16.7)
$8.9
(2.3)
$6.6
16.7
(6.0)
(0.3)
$17.0
14.2%
2.0%
Perpetuity Growth Rate
$1.42
1.24
1.07
2027E
$237.2
$26.5
3.7%
(17.9)
$8.6
(2.2)
$6.4
17.9
(6.0)
(0.1)
$18.1
6.8%
Terminal
Year
$18.5
2.0%
3.0%
$1.54
1.34
1.16
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