I haven't dove too deeply in to that, but Stewart's EBITDA margins were in the low 20s at the time (Versus SCI in the mid to high 20s). Today, CSV's EBITDA margins are ~30%, which I think is slightly above SCI's. So I'm not sure you have the same operaitonal synergies
That said- synergies in that deal were just over 10% of target sales. I…
I haven't dove too deeply in to that, but Stewart's EBITDA margins were in the low 20s at the time (Versus SCI in the mid to high 20s). Today, CSV's EBITDA margins are ~30%, which I think is slightly above SCI's. So I'm not sure you have the same operaitonal synergies
That said- synergies in that deal were just over 10% of target sales. If you had a similar amount for CSV, you'd be looking at ~$40m in synergies, so all in CSV would do ~$150m in EBITDA. At today's prices, you'd be paying ~8x synergized EBTIDA.... roughly in line with historical multiples (including the Stewart deal).
Maybe CSV is worth paying up for; they are very good assets. But I think the underwriting is starting to get aggressive.
True, I totally see the margin point. CSV margins are very much in-line with SCI already. Although I would point out that SCI said it was able to get $100 mln in synergies from Stewart by 2016 ($55 in back office, $25 in purchasing and $20 in revenues synergies), so it was around 20% of target revenues at that time.
I haven't dove too deeply in to that, but Stewart's EBITDA margins were in the low 20s at the time (Versus SCI in the mid to high 20s). Today, CSV's EBITDA margins are ~30%, which I think is slightly above SCI's. So I'm not sure you have the same operaitonal synergies
That said- synergies in that deal were just over 10% of target sales. If you had a similar amount for CSV, you'd be looking at ~$40m in synergies, so all in CSV would do ~$150m in EBITDA. At today's prices, you'd be paying ~8x synergized EBTIDA.... roughly in line with historical multiples (including the Stewart deal).
Maybe CSV is worth paying up for; they are very good assets. But I think the underwriting is starting to get aggressive.
True, I totally see the margin point. CSV margins are very much in-line with SCI already. Although I would point out that SCI said it was able to get $100 mln in synergies from Stewart by 2016 ($55 in back office, $25 in purchasing and $20 in revenues synergies), so it was around 20% of target revenues at that time.