3G Capital, which is best known for mega-deals like Kraft Heinz (KHC.O) and Anheuser-Busch InBev (ABI.BR), is shifting its focus away from food and beverage. Hunter Douglas (HUDN.AS), a Dutch business best known for its window blinds, announced on Friday that the Brazilian-American fund was buying a controlling share. Although the 73 percent premium over the family-controlled company’s stock price on Thursday appears to be excessive, the indicated $7.1 billion enterprise value is only 8 times next year’s EBITDA, according to Hunter Douglas’ own projections. The median Refinitiv estimate for Taiwan’s Nien Made Enterprise (8464. TW) is 12 times.
The purchase looks to be in line with 3G’s cost-cutting strategy. The company led by Executive Chairman Ralph Sonnenberg is expected to earn only half of its Taiwanese competitor’s EBITDA margin next year. Daniel Schwartz and Alex Behring, 3G’s co-managing partners, appear to be reserving some funds for future bolt-on transactions. The equity check will be just $2 billion if they fund the transaction with debt equal to 6 times 2021 EBITDA. According to the Financial Times, the fund has $10 billion in cash on hand. The agreement is smaller and involves a less well-known brand, but everything else is standard 3G.
