Filing Flows › Graco (GGG) › Takeover & LBO
Is Graco (GGG) a takeover target?
A leveraged buyout at today's price plus 30% ($87.67 a share) would return about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $52.23 a share (−23% against today's $67.44). Historically 2.0% of companies with its figures were bought within a year (0.4× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $87.67 | today's $67.44 plus 30% |
| × shares | 163.0 million | |
| = Equity value | $14.3B | |
| + Debt refinanced | $105M | |
| − Cash | $140M | |
| = Enterprise value | $14.3B | 19.6× EBITDA of $729M |
| Fees | $285M | 2% of the price |
| New debt | $4.0B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $10.5B | 72% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $2.4B | $768M | $307M | $321M | $3.7B |
| Year 2 | $2.6B | $805M | $282M | $370M | $3.3B |
| Year 3 | $2.7B | $839M | $254M | $419M | $2.9B |
| Year 4 | $2.8B | $869M | $222M | $469M | $2.4B |
| Year 5 | $2.8B | $895M | $186M | $520M | $1.9B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 15.0× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $13.5B | |
| − Debt left | $1.9B | |
| = Buyer's equity | $11.5B | |
| Money multiple | 1.10× | on $10.5B put in |
| Buyer's yearly return (IRR) | 1.9% |
Price against return
What the buyer makes at other premiums over today's $67.44; the IRR reaches 20% at $52.23 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $74.18 | 6.8% |
| 20% | $80.93 | 4.2% |
| 30% | $87.67 | 1.9% |
| 40% | $94.42 | −0.2% |
| 50% | $101.16 | −2.0% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $2.3B | |
| EBITDA, last 12 months | $729M | 31.6% of revenue |
| Depreciation and amortization | $109M | |
| Capital spending | $59.7M | |
| Debt | $105M | |
| Cash | $140M | |
| Share price | $67.44 | 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 5.4% 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 19% 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, Graco would cost about $94.42 a share, $15.4B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 14.7% | $77.35 | $12.6B |
| Median | 40% | $94.42 | $15.4B |
| High end (a quarter paid more) | 60.2% | $108.04 | $17.6B |
The odds, from history
Historically 2.0% of companies with its figures were bought within a year (0.4× 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.
Graco's latest quarter
Graco, Q3 2026: revenue $586M (+8% year over year), operating margin 25.3%, net earnings $122M, operating cash flow $165M. The chart follows the revenue to costs, profit and cash.
Questions
Is Graco being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Graco?
A leveraged buyout at today's price plus 30% ($87.67 a share) would return about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $52.23 a share (−23% against today's $67.44).
What would a takeover of Graco 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, Graco would cost about $94.42 a share, $15.4B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.