Events: Valeant Pharmaceuticals Quick Thoughts March 2016

Valeant Pharmaceuticals

Events: Quick Thoughts

March 5, 2016


SUMMARY INFO

  • NYSE: VRX
  • Recent PPS: $61.34
  • Shares Out: 351 million
  • Market Cap: $21,530
  • 3Q15 Net Debt: $28,431
  • Enterprise: $49,962
  • Normalized PE: 13.9 times (EV/NOPAT)

DISCUSSION

Since puking up VRX in early November, I have had the ability to monitor the situation from the sideline with a relatively clear mind. Many lessons wrapped up in a single stock; but before getting into them, a brief timeline of events:

  1. April 2014 – Allergan deal confusion drives stock from over $145 to below $120 in April 2014.
  2. August 2014 – On-going Allergan saga + high profile short seller coverage drives stock to below $110 in August 2014.
  3. Late 2014 to Early 2015 – Allergan deal confusion + short seller created ‘entry catalyst’; Allergan-related increased financial transparency + late 2014 Allergan deal failure + early 2015 Salix acquisition created ‘upside catalyst’, driving VRX to over $200.
  4. Early 2015 thru July – Above-mentioned upside catalysts + narrow broad market advance led to a ‘dog pile’ into VRX thru July 2015, driving the stock to over $250.
  5. August to mid-November – Broad market weakness + healthcare ‘hedge fund trade’ unwind + Philidor scandal leads to a collapse in VRX to $70 in mid-November.
  6. Mid-November thru mid-December – Seller exhaustion + Pershing Square ‘doubling down’ + Walgreens agreement drives VRX from $70 to almost $120 (actually may have breached $120 intra-day) in mid-December.
  7. Mid-December 2015 thru early March 2016 – CEO Mike Pearson goes on sick leave + confusion around guidance + ultimate removal of guidance + 10K delay + short seller(s) ‘red zone’ dance + broad market weakness leads to new 52-week low below $60.

17 Mile VRX involvement

  1. Initiate long-term position in April 2014 on Allergan deal-related ‘entry catalyst’
  2. Add in August 2014 on short seller-related forced selling
  3. Super-size in late 2014 on deal conclusion ‘special situation’
  4. Reduce to core long-term position in December 2014 upon conclusion of special situation catalyst
  5. Hold position thru July 2015
  6. Exit position entirely in mid-August
  7. Re-enter position in late September on Hillary tweet-related weakness
  8. Exit position in mid-October on concerns Hillary-related weakness indicative of larger concerns
  9. Re-initiate in late October once Philidor scandal hit
  10. Puke once and for all in early November

Lesson learned

As I will outline in detail in the upcoming investment letter, the VRX situation encapsulates my investment philosophy, portfolio management style, and the critical/painful lessons learned over the last several months.

  1. Philosophy. I will get the exact statistic wrong, but the average stock fluctuates something like 50% from low to high over any given 12-month period. While VRX – and the market environment from June 2014 thru now – perhaps is a bit of an extreme example due to the ‘inhuman volatility’ exhibited recently, the point is well-demonstrated that stock prices and investment theses fluctuate WILDLY over a very short amount of time. The relatively high turnover 17M strategy is predicated on this dynamic…in other words: think long-term in evaluating the value of a business, but manage the position according to the fact that the market’s assessment of said ‘value’ fluctuates wildly over a 1-2 year period.
  2. PM style. Not only was the VRX situation my quintessential investment situation – quality underlying business + entry catalyst + upside catalyst + expert backing – but it fully embodied my portfolio management style. I established a core long-term position into an attractive entry catalyst, then doubled down upon further forced-selling weakness. Once the final bottom was established, I added on the way up once a special situation upside catalyst was identified. And while VRX happened to work out quite quickly on the upside, once a position is ‘working’ in my favor, I leave it alone, as I did with VRX thru July 2015.
  3. Lesson Learned. My involvement with VRX from late September 2015 thru early November 2015 crystallizes – PERFECTLY – how I need to adapt my portfolio management style to volatile/distressed market environments. I run a highly concentrated, aggressive portfolio; and when the market backdrop is relatively stable, this is fine. [And when I say ‘market’ I mean broad market, sector and company…or some combination thereof.] But in the environment that has been in place since July 2015 – for the broad market, healthcare, and VRX – this style has failed miserably. Being heavily concentrated thru extreme downside volatility is incompatible with sound decision making. In a nutshell, thru a great amount of performance pain I have learned to ‘let the market come to me’. Even with a stable market backdrop, it pays to be patient – all the more in a volatile environment.

Prior to my early November ‘puke’, I had established a plan to average down on the core position I had initiated around the time of Pershing Square’s marathon VRX defense conference call; but once the stock declined more than 15% on 11/5/15 on no news, I went against my plan and sold. The stock went on to decline to just over $70 on 11/17/15, thus ‘justifying’ my sale. But like clockwork, the stock went on to rally to almost $120 in mid-December. I had moved on, but it was painful nonetheless.

Key lesson: STICK TO YOUR PLAN (it rarely pays otherwise)

In the November 2015 ‘Quick Thoughts‘ post I outlined why I believed the market was ‘telling’ us something with regard to VRX’s earnings power. Recent events would suggest that was the correct conclusion.

Obviously hindsight is 20-20, but this situation highlights how critical it is to let the market ‘come to you’. Had I stuck to my plan in early November and added to the position, I would have been sitting pretty in mid-December. But I likely would have rode the position down to current lower lows!!

Overriding lesson: Rationally assess the market environment (broad market, industry, and stock); and if volatile/distressed, let the market ‘come to you’ and be cold blooded about exiting even the highest conviction long-term position.

VRX SITUATIONAL UPDATE

I taunted a short seller on ‘FinTwit’ in July/August 2015, saying that I would gladly purchase $180 strike puts from them, as I would be more than happy to ride VRX to $0 alongside some of the smartest long-term money in the world. Be careful what you wish for…or taunt about…

It is ASTONISHING the confusion around the financials/business model of such a large, widely-covered company. In a nutshell it is ValueAct Capital – on the board since 2008; recruiter of Mike Pearson; affirmer of  the accounting; intimately involved with the acquisition program – versus short seller John Hempton – Australian blogger; Bill Ackman despiser; outside observer. (This who v. who could be expanded to Pershing Square v. blogger AZ Value, and Mike Pearson v. Andrew Left…and so on and so forth.)

I repeat – ValueAct Capital has been on the board since 2008, and intimately involved with the acquisition program. The ‘shorts’ will laugh at this statement…but VAC is an extremely upstanding organization, and would not even think about touching a fraudulent accounting operation. (Ironically, one of the ‘shorts’ is a big believer in VAC…)

Emphatically, VRX is NOT a donut.

* * * * * * * * * * * *

After a smoking hot 1H15, the healthcare sector has remained volatile into 2016 as ‘hot money’ takes profits and deleverages more broadly. And that is on top of a very poor broad market environment – one that remains at record high valuations, in a well-defined downtrend, no longer has monetary conditions at its back (Fed tightening; uptrend in HY spreads), and faces a poor global economy.

So with an already unfavorable market backdrop, VRX has not done its stock price any favors by ‘stepping on its crank’: Mike Pearson goes on leave; SEC investigation announced; 10-K delayed; Pearson returns; guidance pulled; analyst meeting scheduling confusion; Pershing Square shenanigans. Not a great recipe for stock price stability.

But for those on the sidelines, the current set-up can be viewed as one enormous ‘entry catalyst’…as long as a ‘donut’ can be ruled out, and normalized earnings power determined.

ANALYSIS

Price is an amazing thing – at $61.34, I have VRX’s enterprise value trading at 13.9 times extremely conservative normalized earnings power. And while I am waiting for 12.5 times to begin averaging into the stock, the risk/reward is a completely different ball game at this level than it was just a few months ago over $100 (obviously).

For all of the bearishness around the Company and its business model, the analyst community continues to project robust financial performance. Consider – Jefferies has a $106 price target, yet projects the following:

  • Revenue
    • 2016: $12.5 billion
    • 2017: $13.7
    • 2018: $14.9
    • 2019: $15.9
    • 2020: $17
  • EBITDA
    • 2016: $7 billion
    • 2017: $7.9
    • 2018: $8.6
    • 2019: $9.2
    • 2020: $9.9
  • EPS
    • 2016: $13.38
    • 2017: $16.13
    • 2018: $18.22
    • 2019: $20.2
    • 2020: $22.30

I believe the answer lies somewhere in the middle: not as robust as the Jefferies projections, but not as dire as the short sellers would lead you to believe.

* * * * * * * * * * * *

It is clear VRX needs to change its business model in the medium-term. The trillion $$$ acquisition runway must be set aside while the Company deleverages and reinvests in organic growth. And because Mike Pearson ‘flew too close to the sun’, pricing power is gone…so margins need to come down, both due to lower pricing and the fact that R&D needs to rise in order to make up for the loss of highly accretive price-driven acquisitions (i.e. Marathon and Dendreon).

I normalize earnings power via the following: establish a ‘base’ level of revenue by averaging 2015- and 2016-estimated revenue, and set normalized EBITDAM to 45%, down from an estimated 55% in 2016. And due to the fact that VRX carries an above-average level of debt, I value the Company on an EV/NOPAT basis.

On a normalized basis I calculate that VRX is worth approximately $98.70, or 17.5 times normalized NOPAT. Assuming five years of deleveraging, and a 17.5 times EV/NOPAT terminal multiple, VRX is worth approximately $113.12.

VRX Analysis March 2016

* * * * * * * * * * * *

My target price to begin averaging into the stock is $47.36 – 12.5 times normalized NOPAT. I have no clue if it will get down to that level, but given how poorly the stock has been behaving I do not believe it is a stretch…especially if the broad market takes another leg down. Further – given the recent lessons learned, and how extremely ‘broken’ the VRX stock price remains, it is imperative that I average into the position over a period of weeks – not days – on big down days.

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36 thoughts on “Events: Valeant Pharmaceuticals Quick Thoughts March 2016

  1. Valeant is a difficult call. Intelligent people on both sides. Why make it so difficult on yourself especially directly after the come back? My recommendation would be to find a smaller hurdle to step over.

    Liked by 1 person

  2. There are no words.

    I was correct in my conclusion back in November that the market was ‘telling us something’; but dead wrong in my recent conclusion that it is emphatically not a donut. I’m not sure you could design a worse conference call and earnings release than what occurred today.

    Like

  3. In a situation like this, using valuation to figure out an entry point is of no help. VRX has to undergo a basing process for a number of months to allow the shareholder base to turn over. That always takes more time than what anyone expects. I fully expect Ackman/SEQUX will have to unload some of their stakes.

    I’m not saying that it’s a perfect analogy because there’s no proved fraud here, but this resembles Tyco about 15 years ago. In that vein, the first step to recovery is to eject Pearson, even if that means paying him a king’s ransom of a golden parachute. In any case, if there are more skeletons that tumble out of the cupboard, VRX can always sue for some of it back.

    I still think that it is a real business with real products and cashflow. VRX is no donut, but it will take a long time for the stock to recover.

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    • Just came on to ask you what your thoughts are. Thanks.

      Agree with all of that. Assuming you wanted to get involved, how would you manage your entry into the stock? Simply average in over time?

      I am wondering if there isn’t an interesting near-term trade given the likely overblown fear of a delay-driven default. And if you could get the board to give JMP the boot, even better. But unlike the ETE situation in early February, you don’t have a commodity + broad market tailwind at your back. If the broad market does poorly in coming months, VRX could continue a slow bleed…

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  4. I would like to see shareholder capitulation, before/after Pearson goes. Either Ackman or SEQUX, the 2 biggest cheerleaders. I need to see both events occur.

    To specifically answer your question, I can’t average in. Averaging into any stock presumes that there is a baseline cashflow + valuation scenario that you’re comfortable with, and I don’t possess the first component here. If I don’t have a baseline cashflow scenario, I can’t come up with valuation either. I no longer trust the numbers that VRX is putting out. That’s very different from saying that VRX’s various business lines aren’t generating cash – they definitely are, and many are darn good businesses. I’m saying that, in the grand scheme of things, I no longer trust the consolidated financials, and indications are that the credit market is having qualms too.

    I am very confident that there will be a big ol’ writedown of goodwill before year-end, because it will be increasingly apparent that a few brand/product franchises are materially impaired. We equity guys can shrug off a goodwill impairment, but the bond guys won’t.

    There are several shoes to still drop with VRX, once Pearson is shown the door. I don’t know what those shoes/issues are, but I’ve seen this story quite a few time before. Biovail, Cendant, Tyco, Healtsouth. They’ve got to remove him from the building before everything/everyone finally comes cleans.

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    • This is a great template.

      At this level, what is the incentive for Pershing, Sequ, or VAC to bail…if it’s not a donut?

      Something like 40% of the stock traded today. Likely Paulson, Tiger, et al puking their brains out. In the event the Big 3 don’t sell, does a firm like Paulson tick that large holder capitulation box?

      Curious – what value does a bond holder place in intangible assets, outside of a debt/equity ratio? (Sorry, it’s late – likely dumb Q).

      Agree 110% on the financials. By far the most concerning part of today. I think the 51% EBITDAM guide is a dream. 45% at most? Maybe 40%?

      Even if revenue holds at $11.1B baseline, they run into big leverage issues. I’m wondering if a large equity raise isn’t in the offing.

      But with Big 3, what do you think upside risk is from a sale of the company?

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  5. If they’ve completely eschewed meaningful/regular price increases, how do they get to 51% or even 45% margins? Through volume growth, in an era where every PBM wants to stick it to them? Xixafan and Jublia won’t get them there. They haven’t explained that and I don’t think they can. I can’t understand it either.

    D/E ratios are an important component of covenants and rating frameworks. A goodwill writedown is merely acknowledging reality, true, but that’s a reality no one wants to face. A writedown will take the bonds down another notch.

    Why would SEQUX or Ackman want to sell VRX even after it’s down 88% from its highs? Well, the original thesis was/is wrong, the situation is now “un-analyzable”, they fire the sponsoring analyst, client/consultant/FoF pressure to constantly explain this fiasco becomes too great….pick a reason. Most of the time, it’s a combination of all these reasons.

    Bill will survive this to some degree, but the PMs @ SEQUX who put the fund into a VRX position of this magnitude will not, in my opinion. You can’t do this in a ’40 Act fund and walk away unscathed, especially after 2 directors have already resigned over this issue. VRX is a “career risk” stock.

    VRX can’t be sold. Who would buy it, considering the quality of its financials? Or the amount of leverage on the balance sheet? Parts of VRX can and will be sold (B&L comes to mind) but not the entire company.

    VRX has to dig itself out of this hole for the next 3-5 years, brick by brick. These sort of stocks are usually dead money for that rebuilding period. Take a look at Cendant for the 3 years after CUC blew up in ’98.

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    • At 40% on $11.1 billion leverage is almost 7 times (30500/4440). In that case, likely not even worth discussing the equity until single digits.

      Good call on SEQUX getting out yesterday. Makes sense given how much they were down.

      SEQUX and VAC are the most baffling in all of this. SEQUX has an analyst whose sole job is to focus on VRX – travels all around the word analyzing the business. Amazing.

      VAC has an analyst that travels with Pearson. They’re on the board intimately involved with the deal making and accounting…from the beginning. Amazing.

      Of the Big 3, I thought Pershing would be the one to bail, given it got out of JCP. I’m not sure why they didn’t – it was a big market cap; not like they were stuck.

      So fact that they are still holding now tells me they think they can get out via a sale. They’re not going to hang in for a 5y recovery. Might as well get out now.

      To ur point – the leverage is obviously automatically an issue for the equity in a sale. But potential buyers are going to know the underlying biz well (true organic growth, sustainable margins, etc) and could enter some form of a sale pending cleaned up financials. Salix and B&L obviously core – and perhaps the generics side could be packaged up and sold to TEVA. Who knows.

      If sold for 8 times EBITDA (40% on $11.1B), equity is $14.30. 12 times, $64.90.

      Like you said, can’t trust the financials. And with zero insight into potential for a sale outside of a guess that Pershing will push for one, it’s impossible to handicap the equity here.

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      • I can see a couple of European Big Pharmas stepping up for B&L and the generics business if the valuation is right definitely, but not the whole kaboodle. Can you imagine the scene in the boardroom of a prospective buyer when the CEO brings up the idea of bidding for all of VRX? With all the headline risk in an election year, battles with PBMs, and short-seller allegations flying around, could you see board members (at least the non-inebriated ones) agreeing to a bid and accepting the “known unknowns”? A CEO & Board that bids for VRX has to accept the very real possibility that their stock could fall 20% on the announcement.

        The Irish and US buyers are non-existent. They’ll be even more risk-averse with an predominantly US institutional shareholder base.

        There’s nothing else for VRX to do except run the business for the next 3-5 years, pay off at least a quarter to a third of the debt, and slowly regain credibility.

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      • Great points on potential bidder.

        Are you on Twitter? Dan Rosenblum (@sharkbiotech) has some good thoughts this morning on the similarities with Tyco. Said TYC bottomed when they brought in a new CEO.

        And I remember from my bit of work on TYC that the Company had significant NT debt maturities right in the heart of the HY crisis back then.

        Do you remember there being this much confusion around the underlying business and ‘reality’ of the cash flows for TYC?

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  6. I suspect that SEQUX blew out of VRX today. SEQUX is only down 7.7% on the day which means its ~19% position was sold during the day, probably before 1pm. If they held it all at 4pm when VRX ended down 51%, I think they would have been down more than 7.7%.

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  7. Fascinating article out of the Financial Times outlining the disagreement between Pershing and VAC on how to present updated guidance to the market.

    http://www.ft.com/intl/cms/s/0/8f670e56-eafa-11e5-888e-2eadd5fbc4a4.html#axzz434jNldUC

    “In particular, directors representing two of Valeant’s largest shareholders — Bill Ackman’s hedge fund, Pershing Square, and Jeffrey Ubben’s ValueAct — disagreed over the right strategy, the people said.
    This was the latest instance of a long-held rivalry between the two investors, who hold sharply differing views over how best to manage the company.”

    “Mr Pearson — having spent two weeks catching up on the company’s performance in his absence — was of the view that the group had suffered a poor first quarter, but would regain its mojo in the spring.
    He therefore wanted to issue a forecast for earnings that signalled this rebound — and was supported in his position by Stephen Fraidin, who joined the company’s board earlier this week as a representative of Pershing Square, Valeant’s second largest shareholder.”

    “However, some directors urged greater caution, including Mason Morfit and Robert Hale, who represent ValueAct. They argued the company should set less taxing goals that it could easily meet, thus paving the way for a recovery in the share price in the coming months.”

    “In the end, the cautious camp won the argument, and Mr Pearson admitted as much on the conference call. “We have taken a little bit more of a conservative approach on forecasting,” he said, as he unveiled a prediction that adjusted earnings would be about $5.7bn in 2016.”

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    • For 7 years, the market encouraged, welcomed and gorged on VRX’s “adjusted earnings”. I think that’s a very relevant issue for VRX longs. The market will now ignore adjusted earnings, especially if M&A comes to a halt and removes the rationale for much of the “adjustments”, and starts asking awkward question about GAAP earnings instead. The longs may protest that it’s unfair, but there’s been a sea-change in how investors perceive VRX.

      Yes, there as much confusion around TYC’s consolidated and sub-level cashflows too. Everyone knew that Koz and Swartz were buying some good businesses (I sold them Raychem, for example), and I also bought some of the pieces (ADT, TEL) after Breen spun them out.

      Again, my belief that VRX is not a donut is based on the quality of their underlying subsidiaries. It’s the consolidated financials that makes me and others wary. It’s becoming increasingly obvious that some of the consolidated forecasts are simply not realistic. I won’t go so far as to say that they’re made up because I don’t have any hard evidence to point to.

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      • Good discussion. In interim conclusion, I like ur template of waiting for Pearson to be shown the door and/or a Big 3 holder finally capitulating. Far too much work ahead to not only pay down debt, but demonstrate what sustainable earnings power and organic growth is ex. M&A.

        From a trading perspective, the fact that the stock has seen very little demand today is, IMO, not a great sign. After yesterday, at minimum I would have expected a big 15-25% spike. And even if it faded, it would have demonstrated at least some signs of life.

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  8. VRX closed at $33.54 on 3/16 (the day I referenced there being very little apparent demand for the stock). It closed Friday (two days later) almost 20% lower, 26 cents above the lows for the week.

    If there is a positive announcement coming, I believe the stock will begin to exhibit pulses of demand, even within an on-going downtrend. (99% likely I do not get involved, just documenting my observations.) For example, back in October/November, even after big declines the stock would spike on decent volume intra-day. The stock continued down to the low $70’s I believe, but ultimately formed a tradeable bottom around/on the Pershing ‘collar transaction’. The stock gapped up big one morning (9% I believe) into the $80’s, then did not look back until circa $120.

    It’s tough to envision right now given the daily liquidation of the stock, but there is a scenario where VRX could double in a very short amount of time on: Pearson leaving + default waiver + 10K filing. The massive complicating factor is the extreme lack of clarity around the stability of the underlying business…

    As I said in my early November ‘puke’ update, I believe the extreme downside stock price volatility is ‘telling’ us something about the healthy of the underlying business. And unless the Company is truly low-balling the market on guidance, it is likely the business is melting before our eyes to a level that simply does not support the current debt load.

    At Friday’s closing price, I have the EV trading at 13.379 times NOPAT. That’s not cheap. (NOPAT = $11.1 revenue x 40% EBITDAM – $.350 maint. capex x .73.) Debt is 6.7 times EBITDA in this scenario. With the current debt load at 10.2 times NOPAT, it’s unlikely there is a margin of safety at any price for the current equity.

    A ‘no growth’ valuation of 10 times earnings is a $29.9 billion EV. If looking for a margin of safety at 7.5 times earnings, the target buy-up-to-price for the debt is approximately $73.50. If looking for 5 times earnings, then $49.

    The lowest price debt is the 2021 5.625% VRX USN, which closed Friday at $75.40.

    http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?ticker=FVRX4072335&symbol=VRX4072335

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    • An alternative path for the current equity is severe dilution.

      If a 5 times leverage ratio is targeted, VRX would need to raise $8,274. At $20 per share that is a 413.712 million share offering.

      In this scenario, the ‘fair EV’ remains the same at $29.86 billion, or 10 times NOPAT. The equity is worth $10.01, and the target BUTP is thus $5 to $7.50.

      Assuming, of course, that estimated earnings power is sustainable, then the appropriate investment is the debt (same as noted above) between $50 and $75. If a massive equity offering is conducted, then (likely) the bonds will rally and the stock will drop, allowing one to sell the bonds close to par and roll the proceeds into the equity between $5 and $7.50 per share.

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  9. Who would buy into a 400mn share secondary, or even 100mn? Forget Pershing or SEQUX, only VAC would be so fearless since they were instrumental in bringing in Pearson and have made a lot of money on VRX. And 100mn shares won’t raise enough cash to help. There’s no equity raise in VRX’s future unless it gets to $50 or $75. They just have to focus on getting a waiver and the 10k out of the door – both of which are eminently doable, unless there’s a huge accounting black hole yet to be disclosed. There was no equity raise for Cendant or Tyco – just blocking and tackling for a few miserably boring years after their implosions.

    The creditors have every incentive in the world to work with VRX. This is a business that operates on trust with PBMs, HMOs etc and no one will want to work with a bankrupt company. The creditors need VRX to go back and focus on running the business for cash.

    Speaking of cash, why not use OCF instead of NOPAT? They generated ~$2.4bn in OCF in the TTM period, if memory serves me right. With no more M&A and $350 maintenance capex, that’s still a good cash run-rate to service the balance sheet.

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    • Agreed – that large of an equity offering is nonsense. But without an equity raise, what on earth are they going to do? Debt is supported by unsustainably high EBITDA, as you and I have discussed.

      Using VRX’s cash flow guidance, but adjusting for a 40% EBITDAM, they generate FCF of $1.5 billion in 2016, and exit the year at 6.5 times leverage. Is their business as stable as Tyco’s to allow for several years of ‘blocking and tackling’ at 6.5 times leverage?

      I’m just trying to figure out where one may want to take a stab at averaging into the capital structure. The debt is increasingly more interesting the more I think about it.

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      • That’s the problem expressed very pithily. The market has woken up to the $30bn in debt. Before this, it didn’t matter. Now, nothing else matters.

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    • They can’t just fire Pearson. They have to fire Schiller too, and the rest of the CFO’s office. Almost anyone in a commercial line function. Remember, Pearson has been there for 7 years and this management team has been assembled by him. They’ve all drunk the Kool-aid over the years. If the Board really wants to wield a clean broom, almost everyone involved in commercial pricing decisions has to go, and that’s just too disruptive right now.

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  10. “The Board requested that former chief financial officer Howard Schiller tender his resignation as a director, but Mr. Schiller has not done so. ”

    Not “has not yet done so”, but “has not done so”. Oh dear !

    Like

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