Trichromatic West

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Trichromatic West

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Trichroma)c West Inc.

Presented to: Ramez Guirgis

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Agenda
Analysis Evalua9on Implementa9on

Trichromatic West

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Analysis
Adagio AdagioCapital Presented by: David | Jennifer | Sam September, 2008

Company Overview
Ramez Guirgis

Trichromatic West

Current

Founded in 1989 Specialty Chemicals Business 12.5MM 2008 Revenue

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Revenue Breakdown
Surfactants Tex)les

Trichromatic West

20% of Revenue

80% of Revenue

Epoxies high poten9al revenue injec9on

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Current Industry Environment

Trichromatic West

Thrived during consolida)on Diverse range of sub-sectors Consolida)on Higher valua)on in the future

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Sub-Sector Environments
Tex)les

Trichromatic West

Surfactant

Epoxy

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Sub-Sector Environments
Tex)les $2.6 billion Market 2.5% Growth Rate
Intensied Compe))on

Trichromatic West

Surfactant

Consolida)on

Epoxy

Main AVrac)on for Buyers

Analysis Recommenda)on Implementa)on
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Sub-Sector Environments
Tex)les $3.6 billion Market 4.3% Growth Rate Surfactant
Lower than Industry GM

Trichromatic West

Epoxy

High Growth Poten)al Contributes to Higher Valua)on

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Sub-Sector Environments
Tex)les $5 billion Market 3.5 % Growth Rate Surfactant
Small numbers of large suppliers

Trichromatic West

Epoxy

Non-material Contribu)on to TCW Valua)on

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Trichromatic West

How much is Trichroma)c West worth today?

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Valua)on
Adagio AdagioCapital Presented by: David | Jennifer | Sam September, 2008

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Valua)on Methods

Trichromatic West

Discounted Cash Flow

Trading Comparable

Transac9on

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Valua)on Methods

Trichromatic West

Discounted Cash Flow

Trading Comparable

Transac9on

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Valua)on Methods

Trichromatic West

Discounted Cash Flow

Trading Comparable

Transac9on

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Valua)on Methods

Trichromatic West

Discounted Cash Flow

Trading Comparable

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DCF WACC

Trichromatic West

WACC

Cost of Equity

CAPM

RE = Rf + Beta x Market Premium

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DCF WACC
TCWs Beta = 0.75 Expected Capital Structure
Debt: 65.8% Equity: 34.2%

Trichromatic West

Rf = 5.08% 10 Year T-bill Risk Premium: 5.07%

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Re = 9.49%

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DCF WACC
Rd = 5.5% Tax = 30% Re = 9.49% Debt/Equity = 65.8% Equity/ Capital = 34.7%

Trichromatic West

WACC = 5.78%

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