Dec. 11 at 10:49 PM
$DXLG this is the math best I can figure. FBB has ~760m in revenue and ~40m in EBITDA, combining with DXLG's ~440m and ~6m for a Pro-Forma 1.2b and 45m EBITDA over the LTM. Cost synergies are expected to bring PF EBITDA to 70m.
Both companies were valued around 7x EBITDA in the transaction - DXLG's EBITDA is obviously very cyclically depressed as is FBB's per the call, with DXLG earning ~56m of EBITDA in 2023
So PF the company now trades at ~7x EBITDA, or ~4x with synergies, at a cyclical low. EBITDA growing to ~70m, whether through synergies or a return to growth, results in a share price of ~
$3.
Messier than an outright acquisition, but of course potentially quite a lot of upside. If this gets back to a ~10% margin (2023 margin) then well over 120m in EBITDA and some multiple expansion gets this to
$10 over time
Going to stick with it
