EX-16.(C)(VI) 6 tm2523589d2_ex16-cvi.htm EXHIBIT 16.(C)(VI)
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Exhibit 16(c)(vi)​
November 25, 2024Project Mangrove Discussion Materials

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1Required IRR15.0% 17.5% 20.0%5.5x $4.66 / (13%) $3.97 / (26%) $3.39 / (37%)6.0x 5.91 / 11% 5.07 / (5%) 4.35 / (19%)6.5x 7.16 / 34% 6.17 / 15% 5.32 / (0%)7.0x 8.41 / 57% 7.26 / 36% 6.28 / 18%ExitMultipleAssumptions Projected FinancialsAbility to Pay Analysis – Unconstrained CaseSource: FactSet as of November 22, 2024.Note: Dollars in millions, unless share price data.(1) Illustrative purchase price determined by center of sensitivity. (2) Based on LTM EBITDA. (3) Based on NTM EBITDA. Illustrative purchase price of $6.17(1) per share would represent a+15% premium to current share price of $5.34– Represents implied TEV of ~$1,490mm (5.3x ’25E EBITDA) Assumes $1,173mm of debt rolled and Revolver drawn to covernegative cash flows– Revolver with new $600mm capacity at S + 275– Existing Term Loan B at S + 300– Super-Priority Term Loan at S + 700 Illustrative transaction close of 12/31/2024 Minimum $50mm cash balance and $25mm transaction fees Management promote of 5.0% Exit at 12/31/30 at 7.0x ’30E EBITDA ($505mm)SourcesxEBITDA $mm %Balance Sheet Cash 0.8x $206 12%Rolled Debt 4.3x 1,173 66%Sponsor Equity 1.4x 392 22%Total Sources $1,771 100%UsesxEBITDA $mm %Equity Purchase Price 1.9x $523 30%Rolled Debt 4.2x 1,173 66%Transaction Fees 0.1x 25 1%Mininum Cash 0.2x 50 3%Total Uses $1,771 100%Entry Share Price / Premium to Current(2)(3)2025E 2026E 2027E 2028E 2029E 2030ERevenue $585 $579 $615 $686 $776 $892YoY % Growth (1%) +6% +12% +13% +15%Adj. EBIT $106 $119 $142 $192 $202 $268(Less): Int. Exp. (97) (101) (110) (115) (118) (120)Pre-Tax Income $9 $17 $32 $76 $84 $147(Less): Taxes (4) (4) (7) (34) (35) (47)Net Income $5 $13 $25 $43 $48 $100(Plus): D&A 173 179 186 193 236 238(Less): Capex (281) (339) (365) (302) (324) (349)(Less): Δ in NWC (15) (0) (5) 1 (4) 4Levered FCF ($117) ($146) ($159) ($65) ($44) ($7)Total Debt $1,290 $1,436 $1,596 $1,660 $1,705 $1,711Total Cash 50 50 50 50 50 50Memo: Adj. EBITDA $279 $298 $328 $385 $438 $505Gross Leverage 4.6x 4.8x 4.9x 4.3x 3.9x 3.4xNet Leverage 4.4x 4.6x 4.7x 4.2x 3.8x 3.3xAnalysis Completedat Request ofSpecial Committee

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2EV /Market '24E-'26E '25E EBITDA % B2C Customers Broadband '25E UFCF (2) NTM Homes TotalCompany TEV Cap. Sales CAGR Margin by Technology (1) Penetration % Revenue EBITDA Passed Subscribers$253.3 $169.1 +1.0% 31.3% 51% 21.7% 6.6x n.a. n.a.161.3 62.8 +0.1% 41.6% 55% 19.3% 7.1x 2,792 5,06722.7 8.2 (3.4%) 28.2% 12% (3.1%) 6.4x 5,819 22,87817.2 7.1 +2.6% 39.9% 20% (10.2%) 7.4x 1,861 6,1274.7 2.4 (1.3%) 54.3% 39% 34.1% 5.6x 1,667 4,7171.0 0.7 +15.6% 33.5% 33% n.a. 8.2x 1,936 6,235Mean $76.7 $41.7 +2.4% 38.1% 35.0% 12.4% 6.9x $2,815 $9,005Median $19.9 $7.7 +0.5% 36.7% 36.0% 19.3% 6.8x $1,936 $6,127Memo: Mangrove On Date of Initial Public ProposalConsensus(6) (2.3%) 43.8% 8.4% 4.5xMgmt. Plan(7) (4.5%) 49.6% 11.0% 4.3x$1.2 $0.3 25% $632 $2,49935%65%73%27%94%6%100%100%100%70%30%Selected Public Trading StatisticsCable Fiber Copper(5)(3) (3)(4) (4)Source: Mangrove Management Plan and FactSet as of 11/22/24.Note: U.S. dollars in billions. Reflects calendarized financials. EBITDA unburdened by stock-based compensation. Financial estimates reflect mean broker estimates inUSD per FactSet. EBITDA figures reflect EBITDA estimates in USD per FactSet. Assumes market value of debt as of 11/22/24 for Lumen.(1) As of latest filing. (2) Unlevered free cash flow defined as EBITDA less capex. (3) Represents Fiber metrics. (4) Includes only Fiber enterprise value. Fiber LTMEBITDA disclosed as 65% of total EBITDA, which is used to calculate Copper EBITDA. Copper business valued at 5.0x LTM Copper EBITDA. (5) Reflects 2025EYoY growth due to lack of 2026E estimates. (6) Consensus estimates as of 5/2/24. Assumes DSO and balance sheet figures as of 3/31/24. (7) Based on MangroveManagement Plan received by Centerview on 11/12/24.

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3WholeCo: +21%Consumer Fiber: +38%14.3x(3)Growth Adjusted: 0.5xWholeCo: +3%Consumer Fiber: +23%(2)9.2xGrowth Adjusted: 0.8xWholeCo: +5%Consumer Fiber: +84%Benchmarking Recent Transaction Targets and MangroveValuation Operational+16%+22%~85%+29%52%$2,778$9,091+18%(1)+19%(2)~65%+11%55%$3,846~$15,000Mangrove+149%+270%~3%+8%~1%n.a.n.a.n.a.’24E Fiber Homes PassedGrowth’24E Fiber SubscriberGrowth’25-28E Revenue Growth% of Homes Passed withFiber in Base PlanEV / EBITDAEV / FiberHomes PassedEV / ResidentialFiber Subscriber’25-28E EBITDA GrowthFiber PenetrationSource: Company filings, Wall Street research, and Mangrove management as of November 12, 2024.(1) Reflects 2024E management guidance.(2) Reflects Q2’24 YoY growth.(3) Includes run-rate synergies and tax attributes./ /‘25E EBITDA Margin 49% 40% 50%% Revenue fromConsumer Fiber28% 45% 11%Acquiror / Target“Other” revenue not allcreated equally (i.e.components of wholesalebusiness, nature of enterprisev. SMB)High value dueto nascency offiber buildAnalysis Completedat Request ofSpecial Committee~8% by 2027