Filing Flows › Gates Industrial (GTES) › Takeover & LBO
Is Gates Industrial (GTES) a takeover target?
A leveraged buyout at today's price plus 30% ($30.98 a share) would return about 5% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $19.56 a share (−18% against today's $23.83). Historically 4.8% of companies with its figures were bought within a year (0.95× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $30.98 | today's $23.83 plus 30% |
| × shares | 255.6 million | |
| = Equity value | $7.9B | |
| + Debt refinanced | $2.2B | |
| − Cash | $831M | |
| + Other claims | $382M | preferred stock, minority interests |
| = Enterprise value | $9.7B | 13.7× EBITDA of $705M |
| Fees | $194M | 2% of the price |
| New debt | $3.9B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $6.0B | 61% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $3.7B | $733M | $297M | $322M | $3.6B |
| Year 2 | $3.8B | $760M | $272M | $367M | $3.2B |
| Year 3 | $4.0B | $787M | $244M | $414M | $2.8B |
| Year 4 | $4.1B | $813M | $212M | $463M | $2.3B |
| Year 5 | $4.2B | $837M | $177M | $514M | $1.8B |
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 | $9.3B | |
| − Debt left | $1.8B | |
| = Buyer's equity | $7.5B | |
| Money multiple | 1.25× | on $6.0B put in |
| Buyer's yearly return (IRR) | 4.6% |
Price against return
What the buyer makes at other premiums over today's $23.83; the IRR reaches 20% at $19.56 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $26.21 | 9.6% |
| 20% | $28.60 | 7.0% |
| 30% | $30.98 | 4.6% |
| 40% | $33.36 | 2.6% |
| 50% | $35.74 | 0.8% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $3.6B | |
| EBITDA, last 12 months | $705M | 19.8% of revenue |
| Depreciation and amortization | $224M | |
| Capital spending | $72.6M | |
| Debt | $2.2B | |
| Cash | $831M | |
| Share price | $23.83 | 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 4.0% 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 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 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, Gates Industrial would cost about $33.36 a share, $8.5B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 14.7% | $27.33 | $7.0B |
| Median | 40% | $33.36 | $8.5B |
| High end (a quarter paid more) | 60.2% | $38.18 | $9.8B |
The odds, from history
Historically 4.8% of companies with its figures were bought within a year (0.95× the average). Its figures put it in decile 5 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.
Gates Industrial's latest quarter
Gates Industrial, Q3 2026: revenue $904M (+6% year over year), operating margin 14.5%, net earnings $86.5M, operating cash flow $61.2M. The chart follows the revenue to costs, profit and cash.
Questions
Is Gates Industrial being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Gates Industrial?
A leveraged buyout at today's price plus 30% ($30.98 a share) would return about 5% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $19.56 a share (−18% against today's $23.83).
What would a takeover of Gates Industrial 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, Gates Industrial would cost about $33.36 a share, $8.5B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.