Filing Flows › Smith A O (AOS) › Takeover & LBO
Is Smith A O (AOS) a takeover target?
A leveraged buyout at today's price plus 30% ($81.99 a share) would return a loss of about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $49.77 a share (−21% against today's $63.07). Historically 2.3% of companies with its figures were bought within a year (0.46× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $81.99 | today's $63.07 plus 30% |
| × shares | 136.1 million | |
| = Equity value | $11.2B | |
| + Debt refinanced | $155M | |
| − Cash | $234M | |
| = Enterprise value | $11.1B | 14.6× EBITDA of $760M |
| Fees | $222M | 2% of the price |
| New debt | $4.2B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $7.1B | 63% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $3.8B | $755M | $320M | $307M | $3.9B |
| Year 2 | $3.8B | $756M | $296M | $326M | $3.5B |
| Year 3 | $3.8B | $765M | $271M | $348M | $3.2B |
| Year 4 | $3.9B | $781M | $245M | $376M | $2.8B |
| Year 5 | $4.0B | $804M | $216M | $412M | $2.4B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 11.2× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $9.0B | |
| − Debt left | $2.4B | |
| = Buyer's equity | $6.6B | |
| Money multiple | 0.93× | on $7.1B put in |
| Buyer's yearly return (IRR) | −1.5% |
Price against return
What the buyer makes at other premiums over today's $63.07; the IRR reaches 20% at $49.77 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $69.38 | 4.2% |
| 20% | $75.68 | 1.1% |
| 30% | $81.99 | −1.5% |
| 40% | $88.30 | −3.8% |
| 50% | $94.61 | −5.8% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $3.8B | |
| EBITDA, last 12 months | $760M | 20.0% of revenue |
| Depreciation and amortization | $94.8M | |
| Capital spending | $50.8M | |
| Debt | $155M | |
| Cash | $234M | |
| Share price | $63.07 | on Oct 30, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows -0.7% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 23% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Smith A O would cost about $83.57 a share, $11.4B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $75.68 | $10.3B |
| Median | 32.5% | $83.57 | $11.4B |
| High end (a quarter paid more) | 51.8% | $95.74 | $13.0B |
The odds, from history
Historically 2.3% of companies with its figures were bought within a year (0.46× the average). Its figures put it in decile 1 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Smith A O's latest quarter
Smith A O, Q3 2026: revenue $940M (-0.2% year over year), operating margin 18.5%, net earnings $126M, operating cash flow $176M. The chart follows the revenue to costs, profit and cash.
Questions
Is Smith A O being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Smith A O?
A leveraged buyout at today's price plus 30% ($81.99 a share) would return a loss of about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $49.77 a share (−21% against today's $63.07).
What would a takeover of Smith A O cost?
Takeovers on record paid a median premium of 32.5% over the share price before the deal (the middle half 20% to 51.8%), according to the 1,437 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Smith A O would cost about $83.57 a share, $11.4B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.