Takeout Value

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Dictionary Says

Definition of 'Takeout Value'

The estimated value of a company if it were to be taken private or acquired. A firm's takeout value considers various metrics, such as cash flows, assets, earnings and multiples used in similar takeovers. The current mergers and acquisitions environment can also affect the takeout value of a company.

There is not an exact formula for takeout valuation, since a variety of metrics, such as EBIDTA multiple, P/E ratio and even firm-specific information can be taken into account. 
Investopedia Says

Investopedia explains 'Takeout Value'

The takeout value is used by both financial analysts and shareholders. The analysts will use the valuation to determine a range of possible price levels for takeover bids, while shareholders can estimate how much return they might receive if their shares are acquired.

Takeout valuation uses the metrics of the target company and compares them to multiples used in similar takeover transactions. For example, a past takeover saw a firm with earnings of $5 million get acquired for $22.5 million. This implies an earnings multiple of 4.5 ($22.5 million / $5 million). A similar company with earnings of $3 million is now being considered a takeover target. The takeout value of the new company would be $13.5 million ($3 million × 4.5). 
Search results for

'Takeout Value'

  • This Week's Activist Filings

    http://stocks.investopedia.com/stock-analysis/2011/This-Weeks-Activist-Filings-JOE-JCG-GFF-FUBC-0223.aspx
    ... marketplace. One includes an attempt to trump a takeout offer while another
    sees one value investor going activist for the first time. ...

  • Big Lots New Stores Drive Growth Outlook

    http://stocks.investopedia.com/stock-analysis/2011/Big-Lots-New-Stores-Drive-Growth-Outlook-BIG-BJ-BIG-FDO-KKR-DG0308.aspx
    ... retailers dates back to the Kohlberg, Kravis & Roberts' (NYSE:KKR) takeout in 2007
    and ... Value and Growth in Big Lots To understand the appeal of the discounters ...

  • A Melancholy "Do Svidaniya" To Wimm-Bill-Dann

    http://stocks.investopedia.com/stock-analysis/2010/A-Melancholy-Do-Svidaniya-To-Wimm-Bill-Dann-PEP-WBD-DANOY-KO-CEDC-NSRGY-CIADF1202.aspx
    ... Although price-to-book value is admittedly not the best metric for valuation, it ...
    Well, not only is management securing a premium takeout price, but there are ...

  • VF Corp Laces Up Timberland

    http://stocks.investopedia.com/stock-analysis/2011/VF-Corp-Laces-Up-Timberland-VFC-TBL-PSS-BWS-SKX-KSWS-WMT0613.aspx
    ... but they're spending less and being much pickier about brands, destinations and
    value for money. Buying a stock just on the hopes of a takeout is risky ...

  • KKR Feasts On Del Monte Foods

    http://stocks.investopedia.com/stock-analysis/2010/KKR-Feasts-On-Del-Monte-Foods-DLM-FDP-CQB-CAG-KKR1128.aspx
    ... The takeout price was done at a small premium to the closing price and ... Gad Sham Gad
    is the Managing Partner of Gad Partners Fund's, value inspired investment ...

  • Family Dollar Says No To Trian Buyout

    http://stocks.investopedia.com/stock-analysis/2011/Family-Dollar-Says-No-To-Trian-Buyout-FDO-DG-KKR-BJ-BIG-HNZ-TIF-WEN-DLTR-FUN0308.aspx
    ... Think of Apollo Management's attempt to takeout Cedar Fair (NYSE:FUN) last year ... lose
    sight of the light, and that what's illuminated is the value, potential and ...

  • BJ's Goes Bye-Bye

    http://stocks.investopedia.com/stock-analysis/2011/BJs-Goes-Bye-Bye-BJ-COST-WMT-TGT-FDO-DG-SHLD0629.aspx
    ... some time and laggards in attractive industries are always appealing takeout candidates ...
    well below rival Costco and a wider universe of value-oriented retailers ...

  • Will 2011 Be Another Wild Year In Software?

    http://stocks.investopedia.com/stock-analysis/2011/Will-2011-Be-Another-Wild-Year-In-Software-BMC-CTXS-VMW-RHT-CRM0107.aspx
    ... heterogeneous packages to work together has clear value in the market. The Bottom
    Line By no means is this a complete list of would-be takeout candidates. ...

  • Eastman Chemical Seems To Get The Long-Term Picture

    http://stocks.investopedia.com/stock-analysis/2012/Eastman-Chemical-Seems-To-Get-The-Long-Term-Picture-EMN-SOA-BRK-A-DD-DOW0201.aspx
    ... in total enterprise value for Solutia, or about nine times trailing EBITDA. That's
    not an especially cheap price, but it's not so unusual for a takeout of a ...

  • Industry At A Glance – Pay TV

    http://stocks.investopedia.com/stock-analysis/2011/Industry-At-A-Glance--Pay-TV-CMCSA-DTV-DISH-CVC-VMED-LNET-KNOL0830.aspx
    ... a small cable provider in eight states, looks like a natural takeout candidate,
    while ... to consolidate the cable industry but also expand into value-added data ...

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