Industry Observations June 30, Internet and Multiline Retail Industry

Transcription

1 Industry Observations June 30, 2017 Internet and Multiline Retail Industry

2 Select Internet and Multiline Retail Industry Public Company Industry Data (USD in millions, except per share data) Company Name Ticker Price at 06/30/17 % of 52 Week High Market Data LTM Operating Data Forward Estimates Equity Value Enterprise Value Debt / Total Capital Total Assets LTM Revenue LTM CY 2017 Revenue Estimate CY 2017 Estimate Internet and Catalog Retail Amazon.com, Inc. AMZN $ % $462,680.3 $462, % $ 80,969.0 $142,573.0 $12,221.0 $166,146.3 $19,009.1 Expedia, Inc. EXPE $ % $ 22,484.0 $ 23, % $ 17,668.9 $ 9,058.3 $ 1,101.8 $10,115.6 $1,853.2 Groupon, Inc. GRPN $ % $ 2,155.5 $ 1, % $ 1,483.8 $ 3,118.5 $ 30.6 $2,904.1 $214.6 HSN, Inc. HSNI $ % $ 1,670.8 $ 2, % $ 1,236.0 $ 3,536.2 $ $3,516.7 $284.3 Netflix, Inc. NFLX $ % $ 64,395.7 $ 66, % $ 14,359.1 $ 9,509.6 $ $11,501.3 $1,078.7 The Priceline Group Inc. PCLN $ 1, % $ 91,921.9 $ 94, % $ 21,994.3 $ 11,014.3 $ 4,167.8 $12,419.6 $4,708.4 Shutterfly, Inc. SFLY $ % $ 1,603.8 $ 1, % $ 1,052.1 $ 1,144.5 $ $1,160.5 $221.4 TripAdvisor, Inc. TRIP $ % $ 5,394.9 $ 4, % $ 2,274.0 $ 1,500.0 $ $1,628.3 $326.5 Multiline Retail Big Lots, Inc. BIG $ % $ 2,135.5 $ 2, % $ 1,599.7 $ 5,184.7 $ $5, $414.9 Burlington Stores, Inc. BURL $ % $ 6,422.9 $ 7, % $ 2,558.9 $ 5,645.2 $ $6, $662.4 Dillard's, Inc. DDS $ % $ 1,683.9 $ 2, % $ 4,114.9 $ 6,332.1 $ $6, $517.4 Dollar General DG $ % $ 19,768.9 $ 22, % $ 11,796.4 $ 22,330.8 $ 2,449.0 $23, $2,457.6 Corporation Dollar Tree, Inc. DLTR $ % $ 16,549.3 $ 21, % $ 15,994.7 $ 20,920.5 $ 2,301.4 $22, $2,589.2 Nordstrom, Inc. JWN $ % $ 7,942.3 $ 10, % $ 7,771.0 $ 14,862.0 $ 1,698.0 $14, $1,609.8 Kohl's Corporation KSS $ % $ 6,592.5 $ 10, % $ 13,244.0 $ 18,557.0 $ 2,326.0 $18, $2,236.7 MGE Energy, Inc. MGEE $ % $ 2,230.9 $ 2, % $ 1,785.3 $ $ N/A N/A Target Corporation TGT $ % $ 28,848.8 $ 38, % $ 37,218.0 $ 69,316.0 $ 7,203.0 $70, $6,622.9 Notes: LTM (latest twelve months); Enterprise Value (market capitalization less total cash and short-term investments plus short-term borrowings and total long-term debt); (earnings before interest, taxes, depreciation and amortization) Source: Capital IQ The material contained in this publication is meant to provide general information regarding valuation topics. This publication does not constitute investment advice with respect to the securities of any company discussed herein, is not intended to provide information upon which to base an investment decision, and should not be construed as such. Professional advice should be obtained before taking any action based on the information contained herein. Publicly available information utilized in this publication has been obtained from sources deemed to be reliable. Houlihan does not guarantee the accuracy or completeness of the information provided within this publication. The material presented reflects information known to the authors at the time this publication was written and this information is subject to change. Houlihan Capital 2

3 Select Internet and Multiline Retail Public Company Valuation Metrics (USD in millions, except per share data) Company Name Ticker Return On Assets Return On Equity LTM Operating Statistics Return On Revenue Capital Growth Growth Margin TEV/ LTM Revenue Trading Multiples TEV/ TEV/ CY 2017 LTM Revenue TEV/ CY 2017 Internet and Catalog Retail Amazon.com, Inc. AMZN 3.6% 14.2% 6.8% 25.7% 34.5% 8.6% 3.2x 2.8x 37.9x 24.3x Expedia, Inc. EXPE 2.2% 5.2% 4.3% 25.8% 36.8% 12.2% 2.6x 2.4x 21.7x 12.9x Groupon, Inc. GRPN -2.1% -53.8% -7.4% 1.7% -3.1% 1.0% 0.5x 0.6x 55.1x 7.9x HSN, Inc. HSNI 11.4% 63.2% 18.9% -3.5% -20.1% 7.1% 0.6x 0.6x 8.6x 7.5x Netflix, Inc. NFLX 2.9% 12.7% 6.6% 32.7% 101.7% 6.8% 7.0x 5.8x 103.0x 61.6x The Priceline Group PCLN 11.9% 22.3% 13.9% 15.6% 14.2% 37.8% 8.6x 7.6x 22.8x 20.1x Inc. Shutterfly, Inc. SFLY 3.0% 2.2% 3.4% 5.9% 16.0% 12.2% 1.6x 1.5x 12.8x 8.1x TripAdvisor, Inc. TRIP 4.2% 7.3% 6.0% 1.3% -13.3% 13.5% 3.2x 3.0x 24.1x 14.9x Mean 4.6% 9.2% 6.6% 13.1% 20.9% 12.4% 3.4x 3.0x 35.7x 19.7x Median 3.3% 10.0% 6.3% 10.7% 15.1% 10.4% 2.9x 2.6x 23.4x 13.9x Multiline Retail Big Lots, Inc. BIG 10.2% 26.0% 21.1% -0.7% -0.3% 7.1% 0.4x 0.4x 5.9x 5.3x Burlington Stores, Inc. BURL 9.7% NM 21.3% 8.2% 21.0% 10.1% 1.3x 1.3x 13.2x 11.4x Dillard's, Inc. DDS 4.7% 9.0% 7.5% -5.2% -16.2% 8.7% 0.3x 0.4x 4.0x 4.3x Dollar General DG 11.2% 22.6% 15.2% 7.8% 3.7% 11.0% 1.0x 1.0x 9.2x 9.2x Corporation Dollar Tree, Inc. DLTR 6.5% 16.8% 8.7% 13.7% 14.4% 11.0% 1.0x 1.0x 9.4x 8.4x Nordstrom, Inc. JWN 8.5% 47.8% 18.5% 2.7% 9.7% 11.4% 0.7x 0.7x 5.9x 6.2x Kohl's Corporation KSS 6.5% 11.8% 8.8% -2.6% -2.4% 12.5% 0.6x 0.6x 4.5x 4.7x MGE Energy, Inc. MGEE 4.7% 10.9% 7.4% 2.3% 7.1% 32.2% 4.5x N/A 14.1x N/A Target Corporation TGT 7.9% 23.2% 12.1% -4.9% -2.8% 10.4% 0.6x 0.6x 5.4x 5.9x Mean 7.8% 21.0% 13.4% 2.4% 3.8% 12.7% 1.2x 0.7x 8.0x 6.9x Median 7.9% 19.7% 12.1% 2.3% 3.7% 11.0% 0.7x 0.6x 5.9x 6.1x Notes: LTM (latest twelve months); NTM (next twelve months); (earnings before interest, taxes, depreciation and amortization); TEV (total enterprise value) Source: Capital IQ Houlihan Capital 3

4 Select Internet and Multiline Retail Public Company LTM Equity Performance 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 10.00% 20.00% Internet and Catalog Retail Dow Jones Industrial Average Multiline Retail S&P 500 Index Note: The indices are derived from the equity performance of the previously listed companies. Source: Capital IQ Houlihan Capital 4

5 Recent M&A Activity in the Internet and Multiline Retail July 1, 2016 to June 30, 2017 (USD in millions) Close Date Target Acquirer Target Company Primary Industry Implied Enterprise Value 2/17/2017 Blue Nile, Inc. Bain Capital Private Equity, LP; Bow Street, LLC; Bain Internet and Direct Marketing $ /23/2016 PersonalizationMall.com, Inc. Bed Bath & Beyond Inc. Internet and Direct Marketing $ /5/2017 ebags, Inc. Samsonite LLC Internet and Direct Marketing $ /17/2016 etailz, Inc. Trans World Entertainment Corporation Internet and Direct Marketing $ /30/2017 Five Sears Department Stores and Two Sears Auto Centers CBL & Associates Properties, Inc. Department Stores $ /30/2016 Shoebuy.com, Inc. Jet.com, Inc. Internet and Direct Marketing $ /17/2016 Monoprice, Inc. YFC-BonEagle Electronic Tech Co., Ltd. Internet and Direct Marketing $ /30/2016 Smoke Free Technologies, Inc. National Tobacco Company, L.P. Internet and Direct Marketing $ /24/2017 Limited Stores LLC, Certain Related Assets Sycamore Partners Internet and Direct Marketing $ /3/2017 Five Shopko Stores N/A General Merchandise Stores $ /8/2016 HSN, Inc., TravelSmith and Chasing Fireflies Businesses Distinctive Apparel Inc. Internet and Direct Marketing $3.00 9/30/2016 ZoomAway, Inc. Multivision Communications Corp. (nka:zoomaway Travel Internet Retail $2.77 2/16/2017 Acumen Brands, Inc., Country Outfitter Sheplers, Inc. Internet and Direct Marketing $1.80 3/2/ Emporium N/A General Merchandise Stores $ /27/2016 Maple Tree Kids, Inc. (nka:aerkomm Inc., Prior to Reverse Aircom Pacific, Inc. (nka:aerkomm Inc.) Internet and Direct Marketing $0.42 7/27/2016 Kaufmann Mercantile, Inc. AHAlife Holdings Limited Internet and Direct Marketing $0.06 6/30/2017 BUYSEASONS, Inc. Rubie's Costume Company, Inc. Internet and Direct Marketing NA 6/30/2017 Renee Claire Inc. Komar, Inc. Internet and Direct Marketing NA 6/30/2017 Capstone Supply LLC ABC Supply Co., Inc. Internet and Direct Marketing NA 6/26/2017 Choxi.com, Inc. J Club, Inc. Internet and Direct Marketing NA 6/8/2017 Tourico Holidays, Inc. Hotelbeds Spain, S.L.U. Internet and Direct Marketing NA 6/7/2017 Selected Assets of Gordmans Specialty Retailers, Inc. Department Stores NA 5/31/2017 Chewy, Inc. PetSmart, Inc. Internet and Direct Marketing NA 5/23/2017 Into The VR World AppSwarm, Inc. Internet and Direct Marketing NA 5/11/2017 Cyberspace Vita, Inc. Green Spirit Industries Inc. Internet and Direct Marketing NA 4/25/2017 Just4MyPet, Inc MailPix, Inc. Internet and Direct Marketing NA 4/25/2017 Lifted Research Group, Inc. Mad Engine Inc. Internet and Direct Marketing NA 4/13/2017 Pro DJ Sound, LLC Stroodl, Inc. Internet and Direct Marketing NA 4/12/2017 Klink Technologies, Inc. Delivery.com, LLC Internet and Direct Marketing NA 4/4/2017 VaycayHero, Inc. RedAwning.com, Inc. Internet and Direct Marketing NA 4/1/2017 Phoenix Office Products, Inc. Office Products Alliance Internet and Direct Marketing NA 3/31/2017 True&Co. PVH Corp. Internet and Direct Marketing NA 3/27/2017 comparehotels.online emedia Group Inc. Internet and Direct Marketing NA 3/16/2017 Vending of Texas, LLC Accent Food Services, LLC Internet and Direct Marketing NA 3/15/2017 Public Auction Finder LLC And Auction Media Group Repokar Inc. Internet and Direct Marketing NA 2/28/2017 Petflow, Inc. Phillips Feed Service, Inc. Internet and Direct Marketing NA 2/28/2017 Hotelsatanywhere.com and InternetHotels.com HotelPlanner.com Internet and Direct Marketing NA 2/27/2017 Crafts Americana Group, Inc. Premier Needle Arts Inc. Internet and Direct Marketing NA 2/27/2017 Sheet Music Plus, LLC Hal Leonard Corporation Internet and Direct Marketing NA 2/23/2017 ShopStyle, Inc. Ebates, Inc. Internet and Direct Marketing NA 2/16/2017 The Ashford Tea Company N/A Internet and Direct Marketing NA 2/13/2017 Aerkomm Inc., Prior to Reverse Merger with Aircom Aerkomm Inc. Internet and Direct Marketing NA 2/6/2017 JunkieDog.com, Inc., Prior to Reverse Merger with Grand Grand Havana Coffee Company (nka:junkiedog.com, Inc.) Internet and Direct Marketing NA 2/3/2017 Rose Laboratories, Inc. Kirkman Group, Inc. Internet and Direct Marketing NA 2/3/2017 CommonKindness, Inc. makeena, inc. Internet and Direct Marketing NA 2/2/2017 Dot & Bo, Inc. OSP Holdings, LLC Internet and Direct Marketing NA 2/1/2017 Word Music, LLC Lorenz Corporation Internet and Direct Marketing NA 1/31/2017 Arrow Vending, Inc. Accent Food Services, LLC Internet and Direct Marketing NA 1/30/2017 The Audio Partners, Inc. Blackstone Audio, Inc. Internet and Direct Marketing NA 1/13/2017 SPECD-OUT Brothers In Arms Firearms LLC Internet and Direct Marketing NA 1/10/2017 ArtList Inc. Artnet AG Internet and Direct Marketing NA 12/31/2016 Fetch, Inc. Chuck & Don's Internet and Direct Marketing NA 12/31/2016 Storenvy, Inc. OSP Holdings, LLC Internet and Direct Marketing NA Source: Capital IQ Houlihan Capital 5

6 S&P Capital IQ - Sector Last 3 Month Equity Performance 10.0% Change in Market Cap by S&P Capital IQ Sector 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% 3/31/2017 4/30/2017 5/31/2017 6/30/2017 Energy Materials Industrials Consumer Discretionary Healthcare Financials Information Technology Telecommunication Services Utilities Consumer Staples Note: The indices are derived from the equity performance of the S&P Capital IQ Sectors. Source: Capital IQ Houlihan Capital 6

7 M&A Deal Flow Statistics by S&P Capital IQ Sector M&A Deal Count - Number of Transactions 16,000 14,000 12,000 10,000 8,000 6,000 6,957 8,845 7,176 7,735 7,544 8,953 7,561 8,024 8,265 8,970 7,120 6,788 6,011 6,954 6,702 5,967 4,000 2,000 4,641 5,372 4,647 4,989 5,391 5,700 5,147 5,062 5,134 5,244 4,543 4,297 4,033 4,197 4,316 3,697 0 $1,000 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q M&A Deals - USA & Canada M&A Deals - Rest of the World M&A Deal Count - Total Transaction Value ($ Billions) $900 $800 $700 $600 $500 $400 $343.6 $409.1 $321.9 $372.8 $381.4 $462.7 $430.2 $512.6 $406.6 $440.3 $419.0 $268.0 $295.1 $445.7 $364.7 $336.2 $300 $200 $100 $246.4 $338.2 $400.7 $251.0 $289.7 $450.7 $402.3 $385.2 $499.4 $408.0 $403.0 $375.6 $293.7 $363.7 $363.7 $338.9 $0 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Transaction Value - USA & Canada Transaction Value - Rest of World Houlihan Capital 7

8 M&A Deal Flow Statistics by S&P Capital IQ Sector Percentage Dollars Invested by Sector 2Q17 Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Real Estate Telecommunications Services Utilities Not Listed Houlihan Capital 8

9 About Houlihan Capital Houlihan Capital is a leading, solutions-driven valuation, financial advisory and boutique investment banking firm. We pride ourselves on being thought leaders in an ever-changing landscape. Houlihan Capital is SOC-compliant, a FINRA and SIPC member and committed to the highest levels of professional ethics and standards. Valuation & Financial Advisory We provide an array of services that include enterprise valuations, portfolio valuation, valuation of carried interest, transaction opinions, tax and financial reporting compliance, purchase price allocations, and a wide variety of consulting services through our Financial Advisory Group. Investment Banking Through our Investment Banking Group, we offer sell side/buy side advisory and capital raises. Through our Special Situations desk, we provide services that fit outside the archetypal verticals, including liquidity solutions, transactional advisory, and secondary market advisory and trading. Litigation Support Our team provides support for a wide variety of situations including commercial and shareholder disputes, derivatives and structured finance litigation, and fraudulent conveyance. For additional information about our Industry expertise and services, visit: Andrew Smith Paul Clark Michael Norton pclark@houlihancapital.com asmith@houlihancapital.com mnorton@houlihancapital.com