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  "docSlug": "40344b686c65",
  "documentTitle": "Houghton Mifflin Harcourt (HMHC)",
  "authorId": "27_Engine_Capital",
  "authorName": "Engine Capital",
  "documentKindSlug": "activist-deck",
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  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2022-03-22 00:00:00",
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  "pageNumber": 13,
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  "notes": "The slide uses a sensitivity table to demonstrate the range of potential returns for an LBO scenario.",
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      "kind": "callout",
      "text": "Using management's forecasts, Veritas could pay $26-$29 per share and still earn a 5-year IRR north of 17.5%",
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      "text": "5-year IRR: 37%",
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      "text": "Using management's revised forecast included in the Schedule 14D-9, we can calculate the company's unlevered free cash flow (\"UFCF\"). We assume $850 million of fixed costs and 65% flow-through above those fixed costs as management outlined on its Q3 2021 investor call. The UFCF projections are the basis for our LBO analyses. We have assumed conservative UFCF exit multiples",
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      "kind": "source-note",
      "text": "Source: Billings per company's Schedule 14D-9, filed on March 7, 2022, UFCF per 3Q21 management presentation",
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      "text": "Houghton Mifflin UFCF projections using management's revised forecast",
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      "text": "Veritas's 5-Year IRR based on management's revised forecast",
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      "kind": "title",
      "text": "This deal is likely to generate outsized returns for Veritas with 5-year IRRs between 31% and 37% under management's revised forecast",
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