Evercore Investment Banking Pitch Book slide image

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 Description Discounted Cash Flow Analysis Peer Group Trading Analysis Precedent M&A Transaction Analysis Discounted Distributions Analysis Premiums Paid Analysis EVERCORE ■ 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 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 ■ ► Calculated terminal values based on a range of multiples of EBITDA as well as assumed perpetuity growth rates 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 15 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ Confidential - Preliminary and Subject to Change ■ Metrics / Assumptions Discounted the projected cash flows to assumed December 31, 2022 effective date 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% Sensitivity Case #2: Unit 8 Expansion's implied net present value per SIRE unit, calculated using discount rates ranging from 10.0% to 15.0% (the "Implied Unit 8 NPV per Unit'"), was added to Sensitivity Case #1's implied SIRE unit value Enterprise value / EBITDA multiples applied to 2022E, 2023E and 2024E Adjusted EBITDA Sensitivity Case #2: the Implied Unit 8 NPV per Unit was added to Sensitivity Case #1's implied SIRE unit value Transaction value / EBITDA multiples applied to 2023E EBITDA Sensitivity Case #2: the Implied Unit 8 NPV per Unit was added to Sensitivity Case #1's implied SIRE unit value Discounted projected distributions to assumed December 31, 2022 effective date Terminal yield range of 8.0% to 12.0% Cost of equity of 9.0% to 11.0% based on CAPM Sensitivity Case #2: the Implied Unit 8 NPV per Unit was added to Sensitivity Case #1's implied SIRE unit value Median 1-Day and 30-Day premiums paid applied to relevant equity prices Sensitivity Case #2: the Implied Unit 8 NPV per Unit was added to Sensitivity Case #1's implied SIRE unit value ŞİŞECAM
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