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consideration to the Company's liabilities, cash, and nonoperating
assets (i.e., the Micron Technology stock).) Mr. Much then
averaged the values obtained under these two approaches and
concluded that the appropriate enterprise value for J.R. Simplot
Co. as of the valuation date was $1,073,320,000.
In using the market capitalization approach, Mr. Much examined
seven comparable public companies6 and concluded that J.R. Simplot
Co.'s "Food Division" (consisting of FPG, AG, and DPG) is similar
to the comparable companies in terms of revenues, total assets,
activity, and liquidity. However, he concluded that the Food
Division was less profitable than the comparable companies and was
highly dependent upon McDonald's for a large portion of its annual
revenue, presenting a risk to which the comparable companies were
not exposed. Applying the total invested capital (TIC) multiples
(including earnings before interest and taxes (EBIT) and earnings
before interest, taxes, depreciation, and amortization (EBITDA)),
Mr. Much determined the TIC value of J.R. Simplot Co.'s Food
Division to be $492,470,000.
Mr. Much performed a similar analysis with regard to J.R.
Simplot Co.'s Fertilizer Division (consisting of MCG), selecting
four public companies for comparison purposes (IMC Global, Inc.,
Potash Corp. of Saskatchewan, Inc., Terra Industries, Inc., and
Vigoro Corp.). After comparing the quantitative factors of the
6 Mr. Much selected the following companies for
comparison purposes: ConAgra, Inc., Dean Foods Co., Flowers
Industries, Inc., Hormel Foods Corp., International Multifoods
Corp., Tyson Foods, Inc., and Universal Foods Corp.
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