Filing Flows › Toll Brothers (TOL) › Takeover & LBO
Is Toll Brothers (TOL) a takeover target?
A leveraged buyout at today's price plus 30% ($199.45 a share) would return a loss of about 1% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $123.68 a share (−19% against today's $153.42).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $199.45 | today's $153.42 plus 30% |
| × shares | 94.4 million | |
| = Equity value | $18.8B | |
| + Debt refinanced | $1.7B | |
| − Cash | $1.1B | |
| + Other claims | $10.8M | preferred stock, minority interests |
| = Enterprise value | $19.5B | 12.5× EBITDA of $1.6B |
| Fees | $391M | 2% of the price |
| New debt | $8.6B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $11.3B | 57% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $10.6B | $1.5B | $659M | $588M | $8.0B |
| Year 2 | $10.6B | $1.5B | $614M | $621M | $7.4B |
| Year 3 | $10.7B | $1.6B | $566M | $657M | $6.7B |
| Year 4 | $11.0B | $1.6B | $516M | $705M | $6.0B |
| Year 5 | $11.3B | $1.6B | $462M | $768M | $5.3B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 9.7× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $15.9B | |
| − Debt left | $5.3B | |
| = Buyer's equity | $10.6B | |
| Money multiple | 0.94× | on $11.3B put in |
| Buyer's yearly return (IRR) | −1.2% |
Price against return
What the buyer makes at other premiums over today's $153.42; the IRR reaches 20% at $123.68 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $168.76 | 5.0% |
| 20% | $184.10 | 1.6% |
| 30% | $199.45 | −1.2% |
| 40% | $214.79 | −3.6% |
| 50% | $230.13 | −5.7% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $10.8B | |
| EBITDA, last 12 months | $1.6B | 14.5% of revenue |
| Depreciation and amortization | $76.2M | |
| Capital spending | $102M | |
| Debt | $1.7B | |
| Cash | $1.1B | |
| Share price | $153.42 | 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 -1.1% 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 25% 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, Toll Brothers would cost about $214.79 a share, $20.3B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 14.7% | $175.97 | $16.6B |
| Median | 40% | $214.79 | $20.3B |
| High end (a quarter paid more) | 60.2% | $245.78 | $23.2B |
Toll Brothers' latest quarter
Toll Brothers, Q3 FY26: revenue $2.7B (-10% year over year), operating margin 13.5%, net earnings $280M, operating cash flow $250M. The chart follows the revenue to costs, profit and cash.
Questions
Is Toll Brothers being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Toll Brothers?
A leveraged buyout at today's price plus 30% ($199.45 a share) would return a loss of about 1% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $123.68 a share (−19% against today's $153.42).
What would a takeover of Toll Brothers 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, Toll Brothers would cost about $214.79 a share, $20.3B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.