EX-99.C.6 7 y51534ex99-c_6.txt PRELIMINARY DRAFT MATERIALS 1 Exhibit (c)(6) [UBS WARBURG LOGO] STRICTLY PRIVATE AND CONFIDENTIAL PROJECT MILL PRELIMINARY VALUATION ANALYSIS APRIL 2, 2001 APRIL 2001 PRELIMINARY DRAFT -- FOR DISCUSSION PURPOSES ONLY 2 VALUATION ANALYSIS AT VARIOUS SHARE PRICES -------------------------------------------------------------------------------- SPRINGS TRANSACTION VALUE AT PROPOSED OFFER PRICE(1)
($MM, EXCEPT PER SHARE) -------------------------------------------------------------------------------- Proposed Transaction Price Per Share 44.00 Total Diluted Shares Outstanding 19.96 -------------------------------------------------------------------------------- 878.2 -------------------------------------------------------------------------------- Less: Option Proceeds (72.7) ================================================================================ TRANSACTION EQUITY MARKET VALUE 805.5 ================================================================================ Plus: Springs Debt (incl. make whole pmts.) 340.2 Plus: Unfunded Pension Liability 22.8 Plus: Unfunded Deferred Comp. Liability 40.5 Less: Cash and Equivalents (2.9) ================================================================================ TRANSACTION ENTERPRISE VALUE 1,206.2 ================================================================================
IMPLIED VALUATION MULTIPLES AT VARIOUS SHARE PRICES(2) --------------------------------------------------------------------------------
PER SHARE VALUE ($) 40.00 42.00 44.00 46.00 48.00 50.00 52.00 55.00 ------------------------------------------------------------------------------------------------ TEV/LTM Revenue(x) 0.50 0.51 0.55 0.55 0.57 0.58 0.60 0.63 TEV/LTM EBITDA(x) 4.4 4.5 4.7 4.8 5.0 5.2 5.3 5.5 TEV/LTM Free Cash Flow(3)(x) 6.9 7.1 7.4 7.6 7.9 8.1 8.3 8.7 TEV/LTM EBIT(x) 7.6 7.9 8.2 8.4 8.7 9.0 9.3 9.7 EMV/LTM Net Income(x) 10.1 10.6 11.1 11.7 12.2 12.8 13.3 14.2 ------------------------------------------------------------------------------------------------
NOTES (1) Based on fiscal year-end 2000 balance sheet (2) Implied multiple based on adjusted fiscal year 2000 results (3) Free cash flow is defined as EBITDA less capital expenditures [UBS WARBURG LOGO] 1 3 PROJECT MILL -------------------------------------------------------------------------------- COMPARABLE COMPANY ANALYSIS
FY2000 1998-2000 5-year Margins ------------ Revenue Growth Current(1) Equity Net Enterprise EBITDA EBIT CAGR Rate(3) Company Ticker Price Value Debt Value (%) (%) (%) (%) -------------------------------------------------------------------------------------------------------- Burlington Industries BUR 2.65 142.3 653.1 795.5 6.0 0.9 (10.2) (30.3) Crown Crafts, Inc. CRW 0.39 3.4 90.6 93.9 nm nm 0.1 (10.9) Dan River DRF 1.90 41.4 351.2 392.6 13.9 7.8 13.2 (2.4) Galey & Lord GNL 2.25 26.9 507.2 534.7 10.9 6.5 3.0 (22.6) Mohawk Industries MHK 28.08 1,471.2 589.8 2,061.0 12.3 9.7 8.9 40.6 Westpoint WXS 9.00 445.2 1,433.2 1,878.4 17.1 12.6 1.0 14.8 Mean 355.1 604.2 959.2 12.0 7.5 2.7 (1.8) Median 91.8 548.5 664.8 12.3 7.8 2.0 (6.7) Harmonic Mean 16.3 303.2 346.0 10.6 3.2 na na High 1,471.2 1,433.2 2,061.0 17.1 12.6 13.2 40.6 Low 3.4 90.6 93.9 6.0 0.9 (10.2) (30.3) Springs Industries SMI 36.10 551.7 393.6 1,045.3 11.3 6.5 2.1 2.5 Springs Industries SMI 44.00 805.5 400.7 1,206.2 11.3 6.5 2.1 2.5 Springs Industries SMI 50.00 925.4 400.7 1,326.1 11.3 6.5 2.1 2.5 Springs Industries SMI 55.00 1,025.4 400.7 1,426.1 11.3 6.5 2.1 2.5 --------------------------------------------------------------------------------------------------------
Enterprise Value to 2000E(2) P/E --------------------------- ------------ Sales EBITDA EBIT FCF(4) 2000E 2001E Company (x) (x) (x) (x) (x) (x) -------------------------------------------------------------------- Burlington Industries 0.49 8.2 nm nm nm 22.6 Crown Crafts, Inc. 0.33 nm nm nm nm nm Dan River 0.59 4.2 7.6 6.7 3.9 11.2 Galey & Lord 0.55 5.0 8.3 6.1 nm 2.7 Mohawk Industries 0.63 5.7 6.50 6.3 8.8 9.2 Westpoint 1.03 6.0 8.2 8.0 6.7 6.1 Mean 0.60 5.7 7.6 6.8 6.5 10.4 Median 0.57 5.2 7.9 6.5 6.7 9.2 Harmonic Mean 0.54 5.5 7.6 6.7 5.8 6.5 High 1.03 8.2 8.3 8.0 8.8 22.6 Low 0.33 4.25 6.5 6.1 3.9 2.7 Springs Industries 0.46 4.3 7.1 6.4 9.1 9.2 Springs Industries 0.53 4.7 8.2 7.4 11.1 11.2 Springs Industries 0.58 5.2 9.0 8.? 12.8 12.7 Springs Industries 0.62 5.5 9.7 8.7 14.2 14.0 --------------------------------------------------------------------
NOTES: 1 Closing Stock Prices as of March 30, 2001 2 Latest twelve months ending December 31, 2000 3 Source: I/B/E/S 5 year EPS growth estimate 4 Free cash flow (FCF) is defined as EBITDA less capital expenditures [UBS WARBURG LOGO] 2 4 PROJECT MILL (CONTINUED) -------------------------------------------------------------------------------- COMPARABLE TRANSACTION ANALYSIS
One Day One One 3-year LTM LTM LTM Prior Week Month Total Equity Revenue EBITDA FCF EBIT Date Premium Premium Premium Enterprise Market LTM Growth Margin Margin Margin Acquiror/Target Announced (%) (%) (%) Value Value Revenue (%) (%) (%) (%) --------------------------------------------------------------------------------------------------------------------------- GCW Southeast Partners/ 8/30/99 65.5 84.6 50.0 155.5 32.5 267.6 (6.1) 9.9 7.4 2.6 Johnston Industries Dan River/ 6/29/98 19.5 22.2 38.9 267.3 172.9 242.9 (20.1) 6.0 (7.5) 3.2 Bibb Company Pillowtex Corp/ 9/21/97 1.5 8.6 30.5 912.5 406.9 1100.1 1.3 7.1 1.8 3.8 Fieldcrest Cannon Inc Springs Industries/ 2/6/95 na na na 143.5 118.0 272.1 3.8 5.4 2.1 1.3 Dundee Mills, Inc Investor Group/ 10/6/99 77.9 75.4 58.2 106.4 66.1 117.6 27.6 15.1 12.5 11.5 Conso International Berkshire Hathaway/ 9/6/00 18.8 23.8 26.7 3277.1 2393.9 4095.7 7.2 13.1 9.6 7.5 Shaw Industries Mean 36.0 42.8 40.8 810.4 531.7 1,016.0 2.3 5.4 4.3 5.0 Median 19.5 23.8 38.9 211.4 145.5 269.8 2.6 8.5 4.8 3.5 Min 1.5 8.6 26.7 106.4 32.5 117.6 (20.1) 5.4 (7.5) 1.3 Max 77.9 34.6 58.2 3,277.1 2,393.9 4055.7 27.6 15.1 12.5 11.5 Harmonic Mean 6.2 21.9 37.5 214.7 95.2 283.2 3.4 8.1 3.2 3.1 Springs Industries @ 44 2/20/01 21.9 21.3 28.5 1206.2 805.5 2,275.1 2.5 11.3 7.2 6.5 Springs Industries @ 50 2/20/01 38.5 37.8 54.7 1,326.1 925.4 2,275.1 2.5 11.3 7.2 6.5 Springs Industries @ 55 2/20/01 52.4 61.6 70.2 1,426.1 1,025.4 2,275.1 2.5 11.3 7.2 6.5 Westpoint Stevens 4/24/00 27.5 30.4 28.5 2113.8 649.2 1883.3 6.7 18.7 10.8 14.2 ---------------------------------------------------------------------------------------------------------------------------
LTM Total Enterprise Value Multiples Net Income -------------------------------- Equity Margin LTM LTM LTM LTM Mkt. Value/ (%) Revenue EBITDA FCF EBIT Net Income ------------------------------------------------------------------------------------- GCW Southeast Partners/ (1.0) 0.58 5.9 7.8 22.3 nm Johnston Industries Dan River/ (0.4) 1.10 18.4 nm 33.9 nm Bibb Company Pillowtex Corp/ 1.5 0.83 11.7 47.3 21.8 23.9 Fieldcrest Cannon Inc Springs Industries/ (0.5) 0.53 9.8 25.4 40.7 nm Dundee Mills, Inc Investor Group/ 4.9 0.90 6.0 7.7 7.9 11.5 Conso International Berkshire Hathaway/ 4.4 0.80 6.1 8.3 10.7 13.3 Shaw Industries Mean ??? 0.79 9.6 19.2 22.9 15.2 Median 9.5 0.81 8.0 8.3 22.0 13.3 Min (1.0) 0.53 5.9 7.2 7.9 11.5 Max ??? 7.10 18.4 47.3 40.7 23.9 Harmonic Mean na 0.74 8.1 11.2 15.4 14.7 Springs Industries @ 44 3.2 0.53 4.7 7.4 8.2 11.1 Springs Industries @ 50 3.2 0.53 5.2 8.1 9.0 12.8 Springs Industries @ 55 3.2 0.53 5.5 8.7 9.7 14.2 Westpoint Stevens 5.5 1.12 6.0 10.4 7.9 6.2 --------------------------------------------------------------------------------
NOTE: (1) WestPoint transaction was terminated on 5/19/00 [UBS WARBURG LOGO] 3 5 PROJECT MILL (continued) -------------------------------------------------------------------------------- * DISCOUNTED CASH FLOW ANALYSIS EXIT MULTIPLE (EBITDA)
(%) 4.00x 4.50x 5.00x 5.50x 6.00x -------------------------------------------------------------------------------- 8.75 41.01 46.66 52.31 57.96 63.60 WACC/ 9.75 38.77 44.18 49.60 55.02 60.44 DISCOUNT 10.75 36.62 41.83 47.03 52.23 57.43 RATE 11.75 34.58 39.58 44.57 49.57 54.57 12.75 32.63 37.43 42.23 47.03 51.83 --------------------------------------------------------------------------------
[UBS WARBURG LOGO] 4