Goddard Industries
Board of Directors
ORCHARD PARTNERS, INC.
Trading in Goddard Shares
Management’s Forecast
(85)
(95)
(122)
(250)
(379)
(257)
NI
(128)
(134)
(155)
(324)
(408)
(154)
EBIT
4,316
4,231
4,148
3,764
3,326
3,903
Sales
2006
2005
2004
2003
2002
2001
Year
Discounted Cash Flow
• Net present value of enterprise is $1,371,000
• Corresponding equity value of $0.74/share
• Does not include corporate charges
• Does not include payment of earnout
• Discount rate of 10.7%
Comparable Acquisitions
• Circor / Rockwood Swendeman
• ECII / Goddard Valves
• Circor / RTK & SART
• Circor / TOMCO & U.S. Para Plate
• Watts / Powers Process Controls
• Uro-Tec
• Bompet
Acquisition Multiples
$0.80
$1,565,000
6.1x
7.9x
Multiple of
EBITDA
$1.62
$3,842,000
1.07x
0.96x
Multiple of
Sales
Equity
Value
Enterprise
Value
Median
Average
Values based on median multiples.
Publicly Traded Comparables
• Circor
• Watts Industries
• Denison International
• Sun Hydraulics
• Gorman-Rupp
Multiples for Public Comps
$0.65
$1,117,000
4.4x
Adjusted Multiple
of EBITDA
$0.90
$1,830,000
7.1x
Multiple of
EBITDA
$1.42
$3,314,000
0.93x
Multiple of Sales
Equity Value
Enterprise
Value
Median
Pro Forma Asset Values
• Book value $1.84
• Tangible book value $0.92
• Liquidation value $0.65
Range of Indicated Values
Orange: based on
EBITDA or cash
flow.
Green based on
revenues.
Yellow based on
reported asset values.
Fair Value Conclusion
• $0.80/share = equity value of $2,152,000
• Corresponding enterprise value is $1,554,000
• Indicated multiples are:
– 0.4x revenues
– 14.5x adjusted EBIT
– 6.1x adjusted EBITDA
– 0.9x tangible book
– 0.4x book