GAPFF - Mittleman Brothers LLC Statement on Sale of Aeroplan
NEW YORK, Aug. 21, 2018 /PRNewswire/ -- We believe that our acquiescence in agreeing to sell Aeroplan for C$450M in cash was the best available outcome for all Aimia stakeholders. We appreciate the Board's efforts in pushing for a vastly improved valuation from the initial C$250M offered, a conditional figure that would have likely been decimated by adjustments.
The outcome should leave Aimia Inc. with just over C$1B in cash to invest in other opportunities, a significant tax loss carry-forward in Canada and the U.S. to facilitate such, and an NAV that we now calculate at C$7.50 per share.
Our revised sum of the parts valuation for Aimia is C$7.50 (USD 5.73), which is 95% higher than yesterday's closing price of C$3.84:
Aeroplan (Canada): C$450M cash from sale, no tax leakage as proceeds far below tax cost basis est. C$1.1B
PLM Premier (Mexico): (48.9%), fair value = US$489M, 10x US$100M EBITDA est. 2019 = US$3.21 per share 5.7M members in fast growing coalition loyalty program anchored by Aeromexico, Mexico's flagship airline. Aimia invested US$124M for 48.9% stake between 2010-2012, and since then received US$84M in cash dividends. At last financing round in 2012, PLM total enterprise was valued at US$518M, and it grew a lot since then. Comps: Smiles Fidelidade S.A. (SMLS3 BZ) and Multiplus S.A. (MPLU3 BZ) trade about 7.5x EBITDA, down sharply in emerging market sell-off, fair value likely closer to 10x EBITDA for both.
Cardlytics (CDLX): ownership (2.978M shares), price on 8/20/18= $18.43 = USD 55M = US$0.36 per share
Think BIG Digital — Air Asia: (20%), est. fair value = USD 50M, US$16 x 16M members = US$0.33 per share
Fractal Analytics (USA): (5%), est. fair value = US$18M (5% of $360M (=6x $60M sales) =US$0.12 per share
Assets (excluding cash) = C$1.254B = C$8.23 / US$6.28 per share
(+ cash & bonds C$576M — C$330M debt — C$323M preferred — C$34M accrued interest) = -C$111M
NAV: = C$1.143B / US$873M / 152.3M shares = C$7.50 / US$5.73 per share (CAD/USD = 1.31 as of 6/30/18)
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SOURCE Mittleman Brothers, LLC