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Fairness Opinion Detail

HSN FOOpen source

HSN to Liberty Interactive / QVC

General Retail/Jul 2017/Centerview, Goldman Sachs

Deal Information

Target
HSN
Acquiror
Liberty Interactive / QVC
Sector
General Retail
Target Type
Public
Acquiror Type
Strategic
Advisors
Centerview, Goldman Sachs

Transaction Metrics

Enterprise Value
$2.6B
EV / LTM Sales
EV / LTM EBITDA
9.8x
EV / Fwd EBITDA

Advisor Transaction Comparables

Comparable transactions cited by the advisor, excluding the subject transaction.

Advisor: Centerview

EV / LTM Comparable EBITDA selected range: 8.0x - 10.0x

19 comps
Dec 2010Jo-Ann Stores, Inc.Leonard Green & Partners, L.P.--7.3x-
May 2012Charming Shoppes Inc.Ascena Retail Group, Inc.--9.9x-
May 2012Cost Plus Inc.Bed Bath & Beyond Inc.--12.7x-
Nov 2012Oriental Trading Company, Inc.Berkshire Hathaway Inc.--7.1x-
Nov 2012The Brick Ltd.Leon's Furniture Limited--7.1x-
Feb 2013Office Max IncorporatedOffice Depot, Inc.--12.2x-
Jul 2013Saks IncorporatedHudson's Bay Company--10.8x-
Sep 2013Neiman Marcus Group, Inc.Ares Management LLC and Canada Pension Plan Investment Board--9.4x-
Dec 2013The Jones Group Inc.Sycamore Partners--8.6x-
Feb 2014Zale CorporationSignet Jewelers Limited--15.6x-
Sep 2014Bluestem Brands, Inc.Capmark Financial Group Inc.--6.3x-
Dec 2014PetSmart, Inc.Buyer Group led by BC Partners, Inc.--9.1x-
May 2015ANN INC.Ascena Retail Group, Inc.--8.6x-
Aug 2015Belk, Inc.Sycamore Partners--6.2x-
Nov 2015PETCO Animal Supplies, Inc.CVC Capital Partners Limited and Canada Pension Plan Investment Board--9.4x-
Feb 2016RONA, INC.Lowe's Companies, Inc.--12.1x-
Oct 2016Cabela's IncorporatedBass Pro Group, LLC--11.8x-
May 2017Kate Spade & CompanyCoach, Inc.--10.4x-
Jun 2017Staples, Inc.Sycamore Partners--5.1x-
Mean-9.5x-
Median-9.4x-

Advisor: Goldman Sachs

EV/LTM EBITDA selected range: 8.0x - 10.0x

19 comps
-Dec 2010
Jo-Ann Stores, Inc.
Leonard Green & Partners, L.P.--7.3x-
-May 2012
Charming Shoppes, Inc.
Ascena Retail Group, Inc.--9.9x-
-May 2012
Cost Plus Inc.
Bed, Bath & Beyond Inc.--12.7x-
-Nov 2012
Oriental Trading Company
Berkshire Hathaway Inc.--7.1x-
-Nov 2012
The Brick Ltd.
Leon's Furniture Limited--7.1x-
-Feb 2013
Office Max
Office Depot--12.2x-
-Jul 2013
Saks Incorporated
Hudson's Bay Company--10.8x-
-Sep 2013
Neiman Marcus Group LTD Inc.
Ares Management LLC and Canada Pension Plan Investment Board--9.4x-
-Dec 2013
the Jones Group (Nine West)
Sycamore Partners--8.6x-
-Feb 2014
Zale Corp.
Signet Jewelers Ltd.--15.6x-
-Sep 2014
Bluestem Brands, Inc.
Capmark Financial Group Inc.--6.3x-
-Dec 2014
PetSmart, Inc.
a consortium led by BC Partners, Inc.--9.1x-
-May 2015
ANN INC.
Ascena Retail Group, Inc.--8.6x-
-Aug 2015
Belk, Inc.
Sycamore Partners--6.2x-
-Nov 2015
Petco Animal Supplies, Inc.
CVC Capital Partners Limited and Canada Pension Plan Investment Board--9.4x-
-Feb 2016
RONA, Inc.
Lowe's Companies, Inc.--12.1x-
-Oct 2016
Cabela's Incorporated
Bass Pro Group, LLC--11.8x-
-May 2017
Kate Spade & Company
Coach, Inc.--10.4x-
-Jun 2017
Staples, Inc.
Sycamore Partners--5.1x-
Mean-9.5x-
Median-9.4x-

DCF Assumptions

Discount rate and terminal value assumptions the advisor selected for its discounted cash flow analysis.

Centerview

Open
WACC
9.0% – 10.0%
Terminal method
Perpetuity growth
Terminal assumption
1.0% – 3.0%
Forecast basis
HSNi internal data and assumptions provided by HSNi management
Forecast period
March 31, 2017 through December 31, 2021

Goldman Sachs

Open
WACC
8.0% – 9.5%
Terminal method
Perpetuity growth
Terminal assumption
1.5% – 2.5%
Forecast basis
Forecasts (Management Forecasts, including Synergies for pro forma analyses)
Forecast period
fiscal years 2017 through 2021
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