Filing Flows › Black Hills (BKH) › Takeover & LBO
Is Black Hills (BKH) a takeover target?
A leveraged buyout at today's price plus 30% ($106.61 a share) would return a loss of about 12% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $20.22 a share (−75% against today's $82.01). Historically 2.8% of companies with its figures were bought within a year (0.56× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $106.61 | today's $82.01 plus 30% |
| × shares | 76.4 million | |
| = Equity value | $8.1B | |
| + Debt refinanced | $4.5B | |
| − Cash | $18.2M | |
| = Enterprise value | $12.6B | 14.5× EBITDA of $868M |
| Fees | $252M | 2% of the price |
| New debt | $4.8B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $8.1B | 63% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $2.4B | $892M | $365M | −$561M | $5.3B |
| Year 2 | $2.5B | $918M | $408M | −$605M | $5.9B |
| Year 3 | $2.5B | $944M | $454M | −$653M | $6.6B |
| Year 4 | $2.6B | $972M | $504M | −$705M | $7.3B |
| Year 5 | $2.7B | $1.0B | $558M | −$760M | $8.1B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 12.3× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $12.4B | |
| − Debt left | $8.1B | |
| = Buyer's equity | $4.3B | |
| Money multiple | 0.53× | on $8.1B put in |
| Buyer's yearly return (IRR) | −11.8% |
Price against return
What the buyer makes at other premiums over today's $82.01; the IRR reaches 20% at $20.22 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $90.21 | −8.7% |
| 20% | $98.41 | −10.4% |
| 30% | $106.61 | −11.8% |
| 40% | $114.81 | −13.2% |
| 50% | $123.02 | −14.4% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $2.3B | |
| EBITDA, last 12 months | $868M | 37.2% of revenue |
| Depreciation and amortization | $300M | |
| Capital spending | $1.0B | |
| Debt | $4.5B | |
| Cash | $18.2M | |
| Share price | $82.01 | 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 2.8% 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 12% 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, Black Hills would cost about $108.66 a share, $8.3B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $98.41 | $7.5B |
| Median | 32.5% | $108.66 | $8.3B |
| High end (a quarter paid more) | 51.8% | $124.49 | $9.5B |
The odds, from history
Historically 2.8% of companies with its figures were bought within a year (0.56× the average). Its figures put it in decile 2 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.
Black Hills' latest quarter
Black Hills, Q3 2026: revenue $466M (+8% year over year), operating margin 21.0%, net earnings $41.0M, operating cash flow $171M. The chart follows the revenue to costs, profit and cash.
Questions
Is Black Hills being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Black Hills?
A leveraged buyout at today's price plus 30% ($106.61 a share) would return a loss of about 12% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $20.22 a share (−75% against today's $82.01).
What would a takeover of Black Hills 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, Black Hills would cost about $108.66 a share, $8.3B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.