Filing Flows › Carter's (CRI) › Takeover & LBO
Is Carter's (CRI) a takeover target?
A leveraged buyout at today's price plus 30% ($41.00 a share) would return about 24% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $45.09 a share (43% against today's $31.54). Historically 4.3% of companies with its figures were bought within a year (0.85× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $41.00 | today's $31.54 plus 30% |
| × shares | 35.6 million | |
| = Equity value | $1.5B | |
| + Debt refinanced | $568M | |
| − Cash | $526M | |
| = Enterprise value | $1.5B | 4.2× EBITDA of $359M |
| Fees | $30.1M | 2% of the price |
| New debt | $977M | 2.7× EBITDA at 7.65% a year; the limit that binds: 65% of the price |
| Buyer's own money | $556M | 36% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $3.1B | $377M | $74.8M | $191M | $786M |
| Year 2 | $3.3B | $394M | $60.2M | $215M | $571M |
| Year 3 | $3.4B | $410M | $43.7M | $240M | $331M |
| Year 4 | $3.5B | $424M | $25.4M | $266M | $65.8M |
| Year 5 | $3.6B | $437M | $5.0M | $292M | $0 |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 3.2× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $1.4B | |
| − Debt left | $0 | |
| + Cash built up | $226M | |
| = Buyer's equity | $1.6B | |
| Money multiple | 2.96× | on $556M put in |
| Buyer's yearly return (IRR) | 24.2% |
Price against return
What the buyer makes at other premiums over today's $31.54; the IRR reaches 20% at $45.09 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $34.69 | 31.1% |
| 20% | $37.85 | 27.6% |
| 30% | $41.00 | 24.2% |
| 40% | $44.16 | 20.9% |
| 50% | $47.31 | 17.8% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $3.0B | |
| EBITDA, last 12 months | $359M | 12.1% of revenue |
| Depreciation and amortization | $50.4M | |
| Capital spending | $40.7M | |
| Debt | $568M | |
| Cash | $526M | |
| Share price | $31.54 | 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 5.0% 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 22% 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, Carter's would cost about $41.79 a share, $1.5B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 20% | $37.85 | $1.3B |
| Median | 32.5% | $41.79 | $1.5B |
| High end (a quarter paid more) | 51.8% | $47.88 | $1.7B |
The odds, from history
Historically 4.3% of companies with its figures were bought within a year (0.85× the average). Its figures put it in decile 4 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.
Carter's latest quarter
Carter's, Q3 2026: revenue $752M (-0.7% year over year), operating margin 7.4%, net earnings $36.6M, operating cash flow −$100M. The chart follows the revenue to costs, profit and cash.
Questions
Is Carter's being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Carter's?
A leveraged buyout at today's price plus 30% ($41.00 a share) would return about 24% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $45.09 a share (43% against today's $31.54).
What would a takeover of Carter's 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, Carter's would cost about $41.79 a share, $1.5B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.