Macabacus Discounted Cash Flow Model Strictly Confidential

Table of Contents

DCF Model

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Discounted Cash Flow (DCF) Analysis
($ in millions, except per share data)
3 Quarters
Today Ending Projected Fiscal Years Ending September 30,
12/31/22 9/30/23 2024 2025 2026 2027 2028 2029 2030 2031 2032
Fractional years per period 0.75 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Cumulative fractional years from close 0.75 1.75 2.75 3.75 4.75 5.75 6.75 7.75 8.75 9.75

Assumptions
Net debt $25.6
Fully diluted shares outstanding 35.159
Tax rate 35.0%

Unlevered Free Cash Flow (UFCF)

EBITDA $94.9 $155.9 $160.1 $161.3 $162.4 $163.6 $164.8 $166.0 $167.2 $168.5

EBITA $82.7 $139.7 $143.9 $144.9 $145.9 $147.0 $148.1 $150.7 $152.4 $153.4
( – ) Taxes (28.9) (48.9) (50.3) (50.7) (51.1) (51.4) (51.8) (52.8) (53.3) (53.7)
Unlevered net income 53.8 90.8 93.5 94.2 94.9 95.5 96.2 98.0 99.0 99.7
( + ) Depreciation 12.2 16.2 16.2 16.4 16.5 16.6 16.8 15.3 14.9 15.0
( – ) Capital expenditures (12.8) (18.0) (19.0) (19.2) (19.3) (19.5) (19.7) (19.9) (20.0) (20.2)
( – ) Change in working capital 2.0 (3.8) (1.3) (0.4) (0.4) (0.4) (0.4) (0.4) (0.4) (0.4)
( – ) Change in deferred taxes – – – – – – – – – –
Unlevered free cash flow – $55.1 $85.2 $89.5 $91.0 $91.6 $92.2 $92.9 $93.0 $93.4 $94.1

DCF Valuation – XNPV Method

( + ) Terminal cash flow (5.0x terminal multiple) $812.2
Total cash flow – EBITDA multiple method – $55.1 $85.2 $89.5 $91.0 $903.8

DCF valuation (XNPV) – EBITDA multiple method $773.0

Check that XNPV yields same result as formulas below –

( + ) Terminal cash flow (0.5% terminal growth) $800.5

Total cash flow – perpetuity growth method – $55.1 $85.2 $89.5 $91.0 $892.1

DCF valuation (XNPV) – perpetuity growth method $766.2

Check that XNPV yields same result as formulas below –
DCF Sensitivity – EBITDA Multiple Method
NOTE: Enterprise value can be computed more simply using TABLEs sensitizing the XNPV result to the WACC and terminal multiple, but TABLEs were purposefully avoided to illustrate how this sensitivity
can be performed without TABLEs, which are slow to calculate.

Enterprise Value Equity Value

Terminal EBITDA Multiple Terminal EBITDA Multiple
4.5x 5.0x 5.5x 4.5x 5.0x 5.5x
Discount 11.0% $751.7 $801.2 $850.6 $726.1 $775.6 $825.0
Rate 12.0% $725.7 $773.1 $820.5 $700.1 $747.5 $794.9
(WACC) 13.0% $700.9 $746.3 $791.8 $675.3 $720.7 $766.2

Implied Perpetuity Growth Rate Value Per Share

Terminal EBITDA Multiple Terminal EBITDA Multiple
4.5x 5.0x 5.5x 4.5x 5.0x 5.5x
Discount 11.0% (1.4%) (0.3%) 0.7% $20.65 $22.06 $23.47
Rate 12.0% (0.5%) 0.6% 1.6% $19.91 $21.26 $22.61
(WACC) 13.0% 0.4% 1.5% 2.5% $19.21 $20.50 $21.79

DCF Sensitivity – Perpetuity Growth Method

NOTE: Enterprise value can be computed more simply using TABLEs sensitizing the XNPV result to the WACC and terminal growth rate, but TABLEs were purposefully avoided to illustrate how this sensitivity
can be performed without TABLEs, which are slow to calculate.

Enterprise Value Equity Value

Terminal Perpetuity Growth Rate Terminal Perpetuity Growth Rate
– 0.5% 1.0% – 0.5% 1.0%
Discount 11.0% $813.7 $840.5 $870.0 $788.1 $814.9 $844.4
Rate 12.0% $744.6 $766.3 $789.9 $719.0 $740.7 $764.4
(WACC) 13.0% $686.1 $704.0 $723.3 $660.5 $678.4 $697.7

Implied Terminal EBITDA Multiple Value Per Share

Terminal Perpetuity Growth Rate Terminal Perpetuity Growth Rate
– 0.5% 1.0% – 0.5% 1.0%
Discount 11.0% 5.1x 5.4x 5.7x $22.42 $23.18 $24.02
Rate 12.0% 4.7x 4.9x 5.2x $20.45 $21.07 $21.74
(WACC) 13.0% 4.3x 4.5x 4.7x $18.79 $19.29 $19.84