{ "docId": "019dd923-622b-71dc-a6d9-b7733990b4fe", "docSlug": "9c639b8b1898", "documentTitle": "Darden Restaurants, Inc. (DRI)", "authorId": "03_Starboard_Value", "authorName": "Starboard Value", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2014-03-31 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 46, "pageCount": 108, "prevPage": 45, "nextPage": 47, "slideType": "preempt_rebuttal", "function": "preempt_rebuttal", "density": "overcrowded", "nDataPoints": 4, "notes": null, "elementsJson": [ "headline_text", "paragraph", "bullet_list", "quote_block", "callout_box" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6d9-b7733990b4fe/46", "deckHref": "/decks/019dd923-622b-71dc-a6d9-b7733990b4fe", "deckJsonHref": "/decks/019dd923-622b-71dc-a6d9-b7733990b4fe.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6d9-b7733990b4fe#slide-46", "components": [ { "bbox": null, "kind": "callout", "text": "New Red Lobster’s valuation will be hindered by its poor performance and likely trade at one of the lowest, if not THE lowest, multiple in the casual dining industry.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-203e-77ad-a6a8-195abdc15169", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.92, "x": 0.04, "y": 0.27 }, "kind": "list", "text": "Red Lobster, as a standalone public Company, given its lack of unit growth, declining same-store-sales, and commodity price headwinds, is likely to trade at a substantial discount to casual dining peers.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c1e75482-c018-4eba-9f7d-761ecf684773", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "EBITDA multiple: 7x", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-203e-77ad-a6a8-200eafcd8fc8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.92, "x": 0.04, "y": 0.15 }, "kind": "paragraph", "text": "We believe, and sell-side analysts appear to agree, that a standalone Red Lobster would have trouble attracting an investor base.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ef79c1a1-576e-4660-9d3d-b8534945d9f1", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.88, "x": 0.06, "y": 0.4 }, "kind": "quote", "text": "We find it difficult to believe many long only investors would have any interest in a standalone RL and believe it would likely trade at the lowest EBITDA multiple within the restaurant universe (less than 7x). – UBS, March 3, 2014", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "576816e2-c7e2-4618-9d60-fe169b1c5f10", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.88, "x": 0.06, "y": 0.6 }, "kind": "quote", "text": "Our assumption is that RL will assume half of the debt for DRI, which is roughly $1.25B. Applying a 6x EV/EBITDA multiple would give us an EV slightly less than $2B, which is $5 per share for RL. – Buckingham, March 21, 2014", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6ab62581-9087-4634-adc0-05cf8f37a13d", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "We find it difficult to believe many long only investors would have any interest in a standalone RL and believe it would likely trade at the lowest EBITDA multiple within the restaurant universe (less than 7x). — UBS, March 3, 2014; Our assumption is that RL will assume half of the debt for DRI, which is roughly $1.25B. Applying a 6x EV/EBITDA multiple would give us an EV slightly less than $2B, which is $5 per share for RL. — Buckingham, March 21, 2014", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-203e-77ad-a6a8-1f746d57dc48", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.92, "x": 0.04, "y": 0.78 }, "kind": "title", "text": "New Red Lobster's valuation will be hindered by its poor performance and likely trade at one of the lowest, if not THE lowest, multiple in the casual dining industry.", "attrs": null, "subkind": "action-title", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "64875850-cd30-444f-b5f0-776740f1f636", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.92, "x": 0.04, "y": 0.04 }, "kind": "title", "text": "New Red Lobster is likely to trade at a substantial discount to casual dining peers", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "151a1a18-6797-41cf-b8cc-74bcaa83661a", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "authority-citation", "slug": null, "matchId": "bd062787-9e76-44a4-9b67-79d889aa8e75", "evidence": "Citing UBS and Buckingham analysts to support the valuation thesis.", "confidence": 0.9 } ], "arcBeats": [ { "to": 107, "from": 44, "beatId": "b1a77d71-e262-47a6-b9b8-0075198da524", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Propose Solution", "beatSlug": null, "evidence": "The document proposes alternative solutions, including a comprehensive value creation plan and a detailed turnaround plan for Darden.", "position": 2, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }