Filing Flows › Mercury Systems (MRCY) › Takeover & LBO
Is Mercury Systems (MRCY) a takeover target?
A leveraged buyout at today's price plus 30% ($97.55 a share) would return a loss of about 0% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%.
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $97.55 | today's $75.04 plus 30% |
| × shares | 59.4 million | |
| = Equity value | $5.8B | |
| + Debt refinanced | $0 | |
| − Cash | $214M | |
| = Enterprise value | $5.6B | 76.5× EBITDA of $73.0M |
| Fees | $112M | 2% of the price |
| New debt | $401M | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $5.3B | 93% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $1.1B | $78.7M | $30.7M | $3.3M | $398M |
| Year 2 | $1.1B | $83.9M | $30.4M | $7.0M | $391M |
| Year 3 | $1.2B | $88.5M | $29.9M | $10.8M | $380M |
| Year 4 | $1.2B | $92.2M | $29.1M | $14.7M | $365M |
| Year 5 | $1.3B | $95.0M | $28.0M | $18.6M | $347M |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 58.2× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $5.5B | |
| − Debt left | $347M | |
| = Buyer's equity | $5.2B | |
| Money multiple | 0.98× | on $5.3B put in |
| Buyer's yearly return (IRR) | −0.4% |
Price against return
What the buyer makes at other premiums over today's $75.04.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $82.54 | 3.4% |
| 20% | $90.05 | 1.4% |
| 30% | $97.55 | −0.4% |
| 40% | $105.06 | −2.1% |
| 50% | $112.56 | −3.5% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $984M | |
| EBITDA, last 12 months | $73.0M | 7.4% of revenue |
| Depreciation and amortization | $72.7M | |
| Capital spending | $34.3M | |
| Debt | $0 | |
| Cash | $214M | |
| Share price | $75.04 | on Oct 22, 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 7.9% 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 21% 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 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Mercury Systems would cost about $97.55 a share, $5.8B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 12% | $84.04 | $5.0B |
| Median | 30% | $97.55 | $5.8B |
| High end (a quarter paid more) | 31% | $98.30 | $5.8B |
Mercury Systems' latest quarter
Mercury Systems, Q4 FY26: revenue $290M (+6% year over year), operating margin 5.0%, net earnings $798K, operating cash flow $42.2M. The chart follows the revenue to costs, profit and cash.
Questions
Is Mercury Systems being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Mercury Systems?
A leveraged buyout at today's price plus 30% ($97.55 a share) would return a loss of about 0% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%.
What would a takeover of Mercury Systems cost?
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Mercury Systems would cost about $97.55 a share, $5.8B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.