Filing Flows › Cummins (CMI) › Takeover & LBO
Is Cummins (CMI) a takeover target?
A leveraged buyout at today's price plus 30% ($583.15 a share) would return about 3% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $370.43 a share (−17% against today's $448.58). At $84.5B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 2.1% of companies with its figures were bought within a year (0.42× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $583.15 | today's $448.58 plus 30% |
| × shares | 138.1 million | |
| = Equity value | $80.5B | |
| + Debt refinanced | $7.1B | |
| − Cash | $4.2B | |
| + Other claims | $1.0B | preferred stock, minority interests |
| = Enterprise value | $84.5B | 15.0× EBITDA of $5.6B |
| Fees | $1.7B | 2% of the price |
| New debt | $30.9B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $55.3B | 64% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $38.2B | $6.0B | $2.4B | $1.5B | $29.4B |
| Year 2 | $40.4B | $6.3B | $2.3B | $1.8B | $27.6B |
| Year 3 | $42.4B | $6.6B | $2.1B | $2.1B | $25.5B |
| Year 4 | $44.1B | $6.9B | $2.0B | $2.4B | $23.1B |
| Year 5 | $45.4B | $7.1B | $1.8B | $2.7B | $20.4B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 11.7× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $83.5B | |
| − Debt left | $20.4B | |
| = Buyer's equity | $63.0B | |
| Money multiple | 1.14× | on $55.3B put in |
| Buyer's yearly return (IRR) | 2.7% |
Price against return
What the buyer makes at other premiums over today's $448.58; the IRR reaches 20% at $370.43 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $493.44 | 8.1% |
| 20% | $538.30 | 5.2% |
| 30% | $583.15 | 2.7% |
| 40% | $628.01 | 0.5% |
| 50% | $672.87 | −1.5% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $35.8B | |
| EBITDA, last 12 months | $5.6B | 15.7% of revenue |
| Depreciation and amortization | $1.1B | |
| Capital spending | $1.3B | |
| Debt | $7.1B | |
| Cash | $4.2B | |
| Share price | $448.58 | on Nov 6, 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 6.7% 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 in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Cummins would cost about $628.01 a share, $86.7B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 14.7% | $514.52 | $71.1B |
| Median | 40% | $628.01 | $86.7B |
| High end (a quarter paid more) | 60.2% | $718.63 | $99.2B |
The odds, from history
Historically 2.1% of companies with its figures were bought within a year (0.42× 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.
Cummins' latest quarter
Cummins, Q3 2026: revenue $9.4B (+14% year over year), operating margin 15.3%, net earnings $1.1B, operating cash flow $1.4B. The chart follows the revenue to costs, profit and cash.
Questions
Is Cummins being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Cummins?
A leveraged buyout at today's price plus 30% ($583.15 a share) would return about 3% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $370.43 a share (−17% against today's $448.58). At $84.5B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Cummins cost?
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Cummins would cost about $628.01 a share, $86.7B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.