United Grain Growers Limited

1
United Grain Growers Limited

• Assessment of Alta-Man Offer
• March, 1997

2
Current Market Price
UGG

• 14.00

3
Valuation based on Stand-Alone DCF
UGG
WACC Growth Rate Price/share
9.6 4 18.42
4
Potential Synergies
UGG
Potential Acquirer With Risk Factors Without Risk Factors
Alta-Man 22.77 35.44
Saskatchewan 25.65 31.36
Pioneer Hi-Bred 24.59 26.80
5
Comparable Companies
UGG
Companies
US companies
Maple Leaf Foods Ltd.
v Canada Malting Co Ltd.
6
Valuation Based on Comparable
UGG
Ratio Price/Share
TEV/LTM Revenue 298.44
TEV/Forecasted Revenue 24.85
TEV/Forecasted EBITDA 51.29
7
Significant Opportunity Costs
UGG

• Less grain volume capacity
• Increased transportation costs
• Lost competitive advantage from RD in new seed
• Increased pressure on already tight margins to
  our farmers