UST Inc. to Altria Group Inc.

Tobacco/Sep 2008/Citi, Perella Weinberg

Deal Information

Target

UST Inc.

Acquiror

Altria Group Inc.

Sector

Target Type

Public

Acquiror Type

Strategic

Advisors

Citi, Perella Weinberg

Enterprise Value

$11.7B

EV / LTM Sales

EV / LTM EBITDA

12.0x

EV / Fwd EBITDA

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

FV / LTM EBITDA selected range: 10.0x - 14.0x

9 comps


Jul 2008	Rothmans Inc.	Philip Morris International Inc.	-	-	9.8x	-
Feb 2008	Skandinavisk Tobakskompagni A/S	British American Tobacco PLC	-	-	11.2x	-
Feb 2008	Tekel A.S.	British American Tobacco PLC	-	-	11.4x	-
Nov 2007	John Middleton, Inc. * Transaction value and multiple exclude $700 million in acquisition tax benefits.	Altria Group, Inc.	-	-	11.9x	-
Mar 2007	Altadis S.A.	Imperial Tobacco Group PLC	-	-	13.7x	-
Feb 2007	Commonwealth Brands ** Transaction value and multiple exclude $400 million in acquisition tax benefits.	Imperial Tobacco Group PLC	-	-	8.6x	-
Dec 2006	Gallaher Group PLC	Japan Tobacco Inc.	-	-	12.9x	-
Apr 2006	Conwood Companies *** Based on reported EBIT of nearly $250 million plus estimated depreciation and amortization equal to 2% of reported sales ($450 million).	Reynolds American Inc.	-	-	13.5x	-
Mar 2005	PT HM Sampoerna Tbk.	Altria Group, Inc.	-	-	13.9x	-
	Mean			-	11.9x	-
	Median			-	11.9x	-

EV / LTM EBITDA selected range: 12.0x - 13.5x

9 comps


Jul 2008	Rothmans Inc. * One-year forward EBITDA publicly available (Perella also computed EV / forward EBITDA for this deal). No per-deal multiples printed.	Philip Morris International Inc.	-	-	-	-
Feb 2008	Skandinavisk Tobakskompagni A/S * One-year forward EBITDA publicly available (Perella also computed EV / forward EBITDA for this deal). No per-deal multiples printed.	British American Tobacco p.l.c.	-	-	-	-
Feb 2008	TEKEL A.S. No per-deal multiples printed.	British American Tobacco p.l.c.	-	-	-	-
Nov 2007	John Middleton, Inc. No per-deal multiples printed.	Altria Group, Inc.	-	-	-	-
Mar 2007	Altadis, S.A. * One-year forward EBITDA publicly available (Perella also computed EV / forward EBITDA for this deal). No per-deal multiples printed.	Imperial Tobacco Group plc	-	-	-	-
Feb 2007	Commonwealth Brands, Inc. No per-deal multiples printed.	Imperial Tobacco Group plc	-	-	-	-
Dec 2006	Gallaher Group Plc * One-year forward EBITDA publicly available (Perella also computed EV / forward EBITDA for this deal). No per-deal multiples printed.	Japan Tobacco Inc.	-	-	-	-
Apr 2006	Conwood Company, LLC * One-year forward EBITDA publicly available (Perella also computed EV / forward EBITDA for this deal). No per-deal multiples printed.	Reynolds American Inc.	-	-	-	-
Mar 2005	PT HM Sampoerna Tbk. * One-year forward EBITDA publicly available (Perella also computed EV / forward EBITDA for this deal). No per-deal multiples printed.	Philip Morris International Inc.	-	-	-	-
	Mean			-	-	-
	Median			-	-	-

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

WACC: 6.75% – 7.25%
Terminal method: Perpetuity growth
Terminal assumption: 0.75% – 1.25%
Forecast basis: -
Forecast period: calendar 2009-2013 (Plan A Projections; 2012-2013 extrapolated by Citi)

WACC: 6.75% – 7.25%
Terminal method: Exit multiple
Terminal assumption: 9.5x – 10.5x (terminal year EBITDA)
Forecast basis: -
Forecast period: fiscal 2008-2012 (Plan A Projections), discounted to 2008-09-03

Advisor	WACC	Terminal method	Terminal assumption	Forecast basis	Forecast period	Filing
Citi	6.75% – 7.25%	Perpetuity growth	0.75% – 1.25%	-	calendar 2009-2013 (Plan A Projections; 2012-2013 extrapolated by Citi)	Open
Perella Weinberg	6.75% – 7.25%	Exit multiple	9.5x – 10.5x (terminal year EBITDA)	-	fiscal 2008-2012 (Plan A Projections), discounted to 2008-09-03	Open