|Shares Out. (in M):||89||P/E||0.0x||0.0x|
|Market Cap (in $M):||956||P/FCF||0.0x||0.0x|
|Net Debt (in $M):||260||EBIT||0||210|
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DOLE is not just a fruit and vegetable company. DOLE is a real estate and hard asset company with a fruit and vegetable operation attached to it. Investors are dramatically underestimating the incredible breadth and value of DOLE’s non-core assets (it’s not just farmland!), causing DOLE shares to trade at a severely depressed multiple of what management has stated are trough earnings. On Monday, DOLE will close on the sale of its Asian businesses for $1.7 billion, allowing the company to retire virtually all of its debt, creating a dirt cheap stub trading at 3-4x PF EBITDA that is begging to be re-levered for a large special dividend or share buyback and/or taken private. I estimate fair market value for DOLE shares is at least 50-100% higher than the current price, with a large margin of safety and even greater potential upside based on performance, financial engineering and likely underestimated hidden asset value.
Key Non-Core Assets
Notes on Pro Forma Valuation
|Stock Price||$ 10.72||$ 10.72|
|- Cash||(92)||92||-||assume $0 cash for conservatism; all cash should be retained|
|+ Debt||1,694||(1,434)||260||per M&A call gross debt $260mm|
|+ Pension & OPRB||245||245|
|TEV (ex. Pension & OPRB)||$ 2,559||$ 1,216|
|TEV (incl. Pension & OPRB)||$ 2,804||$ 1,462|
|PF TEV (ex. Pension & OPRB)||$ 1,216||$ 1,216||$ 1,216|
|PF TEV (incl. Pension & OPRB)||$ 1,462||$ 1,462||$ 1,462|
|Oahu Land (18,260 acres)||195||205||215||$217.3mm asking price (http://www.cbre.us/o/baltimore/properties/oahu-land/pages/overview.aspx)|
|Other "Non-Core" Hawaii Land (~6,740 acres)||67||71||74||est at $10-11k/acre; p. 4 of M&A pres says 25k non-core Hawaii acres in total|
|Land at 1 Dole Dr., Westlake Village, CA (Corp HQ)||15||23||30||30 acres of property, value at $0.5-1.0mm/acre (http://goo.gl/maps/JntCS)|
|Building at 1 Dole Dr., Westlake Village, CA (Corp HQ)||65||100||150||169k sf, $65mm cost to build in 1999 (http://assessormap.co.la.ca.us/mapping/viewer.asp)|
|Land at 2 Dole Dr. (Four Seasons/Wellness Center/Spa)||10||15||20||20 acres of property, value at $0.5-1.0mm/acre (http://goo.gl/maps/JntCS)|
|Buildings at 2 Dole Dr. (Four Seasons/Wellness Center/Spa)||-||100||200||20 acres, $81mm cost to build ex. land, improvements alone assessed at $159mm|
|Bombardier Global Express||15||20||25||http://registry.faa.gov/aircraftinquiry/NNum_Results.aspx?NNumbertxt=N85D|
|Other "Non-Core" Assets||200||200||200||this is a guess, includes 88k owned acres ex. Hawaii, housing compounds, research facilities, schools and hospitals|
|Total||567||733||914||"Over $500mm FMV of non-core assets (e.g. idle land)" - p. 10 of M&A presentation|
|Excess Working Capital||-||50||100||Up to $200mm per M&A call Q&A|
|PF Adjusted TEV (ex. Pension)||649||433||202|
|PF Adjusted TEV (incl. Pension)||894||678||447|
|2013 EBITDA||150||160||170||Mgt guidance, calls this "trough" earnings in M&A call|
|+ Cost Savings||50||50||50||Hard cost savings (largely corporate o/h) per mgt guidance, to be fully run-rated late 2013|
|2013 PF EBITDA||$ 200||$ 210||$ 220|
|Normalized Capex||70||70||70||Per Q4 conf call 60-70 range; $100mm 2013 strategic capex funded from TL & CFO per Q4 conf call|
|2013 PF EBITDA - Norm. Capex||$ 130||$ 140||$ 150|
|PF Adjusted TEV (incl. Pension) / 2013 PF EBITDA||4.5x||3.2x||2.0x|
|PF Adjusted TEV (incl. Pension) / (2013 PF EBITDA - Norm. Capex)||6.9x||4.8x||3.0x|
|2013 PF EBITDA - Norm. Capex||$ 140||$ 140||$ 140|
|Multiple||10.0x||11.0x||12.0x||8-10% unlevered FCF yield|
|TEV||$ 1,400||$ 1,540||$ 1,680|
|- Pension & OPRB||(245)||(245)||(245)|
|+ Cash||-||-||-||Very conservative, likely $90mm+ of cash|
|+ Non-Core Assets||500||600||700||Let's be conservative|
|Value/Share||$ 15.63||$ 18.33||$ 21.02|
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