Greenbackd

Zero Hedge has another interesting post, A Quick And Dirty LBO Screen, on the potential for a wave of going private deals. Zero Hedge uses “a simplistic template from UBS” to identify the thirty companies that would “generate the highest stock return should they get acquired.”

Zero Hedge assumes:

…a 4.5x Debt/EBITDA pro forma leverage (as much as TPG would like, 10x leverage is not coming back…Unless Joe Cassano is hired to run Chrysler’s take private group), and also assuming a 40% equity portion in the transaction. In other words, these are the companies that at least on paper have the highest equity expansion potential in a 7.5x EV/EBITDA.

Zero Hedge employs its typically elegant reasoning to identify the companies:

While this analysis ignores whether or not any of these companies actually generate substantial cash flow to cover pro forma interest, or are a logical fit for any financial acquiror, any company not on this list is likely already equity heavy and as a result even if acquired will not result in material upside.

…

This below list by no means suggests that any of these companies on it will be LBOed: it should merely be used a benchmark for modeling purposes.

Here’s the screen:

(Click to enlarge)

[Full Disclosure: No positions. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. Do your own research before investing in any security.]