On May 6, 2014, Simon Property Group Inc. (NYSE: SPG) announced shares of Washington Prime Group Inc. will be distributed after the market close on May 28, 2014, with regular way trading scheduled to begin on the NYSE on May 29, 2014, under the ticker “”WPG””. Shares of WPG will be distributed on a 1:2 basis to SPG holders as of May 16, 2014. Trading on a “”when-issued”” basis is expected to commence on or about the record date. The spin-off is still subject to an effectiveness declaration of the company’s Form 10 filing by the SEC and WPG’s listing being accepted by the NYSE.

Washington Prime Group will own or have interest in 54 strip centers and 44 malls in 23 states, each generating $10 million or less in net operating income (NOI), for initial annual NOI of approximately $400 million and funds from operations of about $1.60 per share. The entity’s assets total about 53 million square feet with occupancy of 94.9% at strip centers and 90.8% at malls. Washington Prime Group will have a significant presence in Illinois, Indiana, Ohio, Florida and Texas. The transaction is reminiscent of the 2011 spin-off by General Growth Properties Inc. (NYSE: GGP) of its Class B malls into Rouse Properties Inc. (NYSE: RSE).

As noted in the initial Simon Property Group Inc. Spin-Off Report (March 5, 2014), the fair value calculations would be adjusted based on the finalized distribution ratio, capital structure, dividend policy and changes in company/industry fundamentals. The fair value for WPG is revised to $26.50 per share (previously $26.10, when accounting for the share distribution ratio) due to a higher peer group multiple. The fair value estimate is based on a price/funds from operations (FFO) multiple applied to management’s 2014 FFO guidance of $1.60 per share, and a peer group yield of 4% on the expected $1.00 per share dividend. WPG’s portfolio will consist of 55% strip properties and 45% mall properties. Separating these lower performing assets will likely result in some market participants wishing to value Washington in line with strip centers at 15.5x FFO. However, mall locations will account for 69% of GLA and 70% of NOI and trade at 18.0x FFO. Thus, there is ample justification to compare the portfolio to a mix of strip centers and higher-valued mall operators, or approximately 17.5x FFO.

The fair value estimate of $163 per share for post-spin SPG remains intact. Please see the initial Simon Property Group Inc. Spin-Off Report (March 5, 2014) for further details.

On May 6, 2014, Oil States International Inc. (NYSE: OIS) announced shares of Civeo Corporation will be distributed after the market close on May 30, 2014, with regular way trading scheduled to begin on the NYSE on June 2, 2014, under the ticker “”CVEO””. Shares of CVEO will be distributed on a 2:1 basis to OIS holders as of May 21, 2014. Trading on a “”when-issued”” basis is expected to commence on or about May 19, 2014. The transaction still requires an effectiveness declaration by the SEC.

Following the separation of its Accommodations segment, Oil States will operate in two segments: Offshore Products and Well Site Services. The Well Site Services business is focused on US land drilling and well completion. It is affected by shifts in US rig count and as a result can be very cyclical. The Offshore Products segment manufactures connectors and other equipment for offshore rigs, platforms, and pipeline. Products are sold worldwide, including the North Sea, West Africa, and Southeast Asia. Cycles for this segment will be driven by offshore drilling and production activity.

The spin entity provides housing, catering, and on-site services for oil workers and miners in long-term development areas, including the Canadian oil sands and Australian mining communities. The structures tend to be portable, modular configurations designed and built by the company. Civeo will initially be spun off as a C-corporation. However, management is also considering converting the spin-off into a real estate investment trust (REIT). A feasibility study must be conducted first. The operations typically generate relatively stable ongoing revenue streams from long-term contracts with E&Ps and mining companies. These contracts would seem likely to lend themselves well to a REIT structure, in which investors demand relatively secure dividends. However, they are not fully protected from commodity price risk.

Beginning in 2013, weak metallurgical coal (met coal) prices led to declining room utilization for the Australian segment. The fair value for Civeo is revised to $23 per share (from $28.50, adjusted for the distribution ratio), based on a 9.4x multiple applied to a 2014 EBITDA estimate of $325 million. The EBITDA projection assumes $18 million in additional standalone costs and a $20 million contribution from the new Canadian Lodge in the Athabasca oil sands in 2H 2014. REIT conversion could be elected and become effective in either January 2015 or January 2016. Conversion to a REIT would add $6 to the fair value.

The key risk to Civeo would be continued weakness in met coal prices resulting in further declines in Australian village utilization. However, a recovery in utilization in Australia and the addition of rooms at Canadian lodges offers significant long-term upside. The Accommodations business generated about $411 million in EBITDA in 2013 (inclusive of $18 million in standalone costs). A valuation of $58 per share is unchanged for post-spin OIS, as the modestly reduced post-spin net cash level is offset by a lower share count (due to the ongoing repurchase plan). On a SOTP basis, a pre-spin fair value of $104 is derived if Civeo remains a C-corp. and $116 if REIT conversion is elected. See the initial Oil States International Spin-Off Report, dated February 18, 2014, for further details.

On May 1, 2014, National Oilwell Varco Inc. (NYSE: NOV) announced shares of NOW Inc. will be distributed after the market close on May 30, 2014, with regular way trading scheduled to begin on the NYSE on June 2, 2014, under the ticker “”DNOW””. Shares of DNOW will be distributed on a 1:4 basis to NOV holders as of May 22, 2014. Trading on a “”when-issued”” basis is expected to commence on or about May 20, 2014. The transaction still requires acceptance of DNOW’s listing by the NYSE and the company still awaits an opinion from its legal counsel regarding the tax-free status of the transaction.

NOW will be a pure-play provider of maintenance, repair, and operating (MRO) supplies to global energy and industrial markets, which represent 85% of the current Distribution segment’s revenue. The separation follows a series of acquisitions within the segment. The Distribution business is less cyclical than the much larger rig construction operations, although both can be affected by variations in drilling activity and active rig count. The Distribution segment peer group trades at a higher multiple because of its greater revenue stability and cash flow. Capital expenditure requirements tend to be limited, although infrastructure investment may be necessary in order to open new distribution sites.

As noted in the initial National Oilwell Varco Spin-Off Report (March 25, 2014), the fair value calculations would be adjusted based on the finalized distribution ratio, capital structure, dividend policy and changes in company/industry fundamentals.
Prior to the 2012 acquisitions of C.E. Franklin and Wilson Supply, NOV’s Distribution business was generating an operating margin of 7.8%. Following the purchase of the historically less profitable operations, the segment margin declined below 6%. Competitive pressures have also forced down margins over the last 12 months. Ultimately, the key catalysts for NOW as a standalone business would be the expansion of the branch network organically or through acquisition, or margin improvement at the recently acquired businesses to the company’s historical levels or closer to the peer group average. Since this is not a near-term goal, one may consider applying the historical multiple for the group. Over the last seven years, the peer group has traded at about 7.5x forward EBITDA. The recent multiple expansion may be due to a series of factors, including stronger growth forecasts and better opportunities to consolidate the industry, as well as evidence that the sector can provide more stable returns than other areas of the energy supply chain. Applying a 7.5x multiple to EBITDA of $324 million (assuming a 7.8% operating margin on the same 2014 sales forecast, while maintaining all other data points) results in a fair value of $23.59 per share.

Following the separation, NOV will focus on manufacturing oilfield equipment, including drilling rigs, top drives, and coiled tubing. The business is far more capital intensive than the Distribution business and will exhibit much more cyclicality. A valuation of $75 per share is derived for post-spin NOV. Backlog has grown considerably through increased international offshore rig demand, as well as through acquisitions. However, global offshore rig utilization has softened over the last six months and day rates have declined, which could be of concern, particularly in 2H 2014. See the initial National Oilwell Varco Spin-Off Report, dated March 25, 2014, for further details.

On April 30th, Aker Solutions ASA (Ticker: AKSO NO, Market Capitalization: NOK 26.4 billion—USD 4.4 billion based on an exchange rate of USD 1 = NOK 5.97) announced its plan to separate its subsea and field design segments from its oilfield services assets. The former segments will belong to the new Aker Solutions, while Akastor will comprise the latter set of businesses. The rationale for the demerger is that the split will speed up the streamlining process Aker Solutions commenced a few years ago, lower costs and increase focus on specific markets and customers. The extraordinary shareholder meeting regarding the transaction will be held on August 18th. Shareholders of Aker Solutions will own one share of the new Aker Solutions and one share of Akastor for each AKSO share held. The spin-off is expected to be completed by September 2014.

Aker Solutions’ largest shareholder, directly and indirectly—through Aker Kvaerner Holding AS—is Aker ASA (Ticker: AKER NO). Aker is the publically traded holding company of Norwegian billionaire Kjell Inge Røkke. While Aker Solutions traces its roots back to 1841, its involvement in the Oil & Gas industry commenced in the 1960s, along with Norway’s energy discoveries. In 2002 the company, named Aker Maritime at the time, merged with Kvaerner, creating an industrial conglomerate, Aker Kvaerner. After that transaction, a series of divestments followed. In 2011, Aker Solutions spun off Kvaerner SA (Ticker: KVAER NO), and became a pure oil services company.

After the spin-off, new Aker Solutions will comprise the Subsea, Umbilical, Engineering & Maintenance and Modifications & Operations segments of the pre spin-off entity. New Aker Solutions will focus on the deepwater and subsea markets of Norway, Western Africa and Brazil. It will offer differentiated products that can generate ample cash flow and require limited investment. For the trailing-twelve-month period ending on March 31st, 2014, new Aker Solutions generated revenue and EBITDA of NOK 29.2 billion and NOK 2.3 billion, respectively.

Akastor will be comprised of a more diverse group of assets, including Drilling Technologies, Aker Oilfield Services, Surface Products and Process Systems. Additionally, the company will own significant financial assets and real estate and offer services such as HR, IT and finance to engineering clients including the new Aker Solutions—through its Business Solutions segment. The company will be more capital intensive and cyclical. For example its Drilling Technologies segment is driven by new rig orders, as opposed to new Aker Solutions’ Engineering & Maintenance business. On a pro forma basis, Akastor’s revenues and EBITDA for the trailing-twelve-months as of March 31st, 2014, were NOK 14.7 billion and NOK 1.5 billion, respectively.

On April 30, 2014, Noble Corp. (NYSE: NE) announced that the company would no longer pursue the public offering of a 20% stake in its standardized rig fleet and instead will opt for a full tax-free spin-off of shares in the entity, Paragon Offshore Ltd. to NE shareholders in 3Q 2014. The decision might indicate limited market interest in the entity. As noted in The Spin-Off Report Radar Screen, investor demand for these assets seemed likely to be extremely subdued. Paragon is expected to list on the NYSE under the ticker “PGN”. The spin-off still requires the filing of a Form 10, an effectiveness declaration from the SEC, and final Board approval.

The proposed transaction may remind readers of the 2009 spin-off of jackup rig operator Seahawk Drilling from Pride International (NYSE: PDE). Within two years, Seahawk filed for bankruptcy protection. Former Seahawk CEO Randall Stilley will be CEO of Paragon. However, Noble has greater international diversification in its fleet, and the jackup market has started showing signs of improvement following the April 2010 Gulf oil spill. Jackup rigs drill in shallower water, typically for natural gas, and are usually under short-term contracts. As a result, these rigs generate lower dayrates and exhibit less stable utilization than floaters and bigger rigs drilling in deep water.

Paragon assets including five drillships, three semisubmersibles, 34 jackups, and one floating, production, storage and offloading (FPSO) unit. Its closest comparable is Hercules Offshore Inc. (NASDAQ: HERO), which trades at 0.8x assets and 4.6x EBITDA. Applying those multiples to PGN’s assets and EBITDA (assuming flat 2014), one may derive an enterprise value for the spin entity of about $3.2 billion.

A spin-off of the standard-spec rigs would likely generate a higher multiple for the remaining company, reducing its costs of capital. This could benefit Noble if it continues its global new-build program, taking advantage of long-term contracts for specialized rigs drilling in deepwater for oil. Larger offshore drilling fleet operators tend to trade at higher multiples than smaller jackup fleets. Noble and its peer group, which includes Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), and Transocean (NYSE: RIG), trade between 6.5x and 7x forward EBITDA. Backing out PGN’s projected EBITDA contribution from NE’s consensus 2014 estimate, results in EBITDA of $1.65 billion. Applying a 6.7x multiple to NE’s projected 2014 EBITDA results in an EV of $11.1 billion. Based on this rough, preliminary exercise, one may derive a pre-spin EV of $14.3 billion. Based on NE’s net debt of $5.6 billion and share count of 254 million, a pre-spin fair value of $34 per share is reached.

On April 30, 2014, Energizer Holdings Inc. (NYSE: ENR) announced plans to separate into two standalone publicly-traded companies, Personal Care and Household Products, through a tax-free distribution of shares of one of the segments (yet to be announced) to shareholders. The transaction is expected to be completed in mid 2015. The spin-off still requires an effectiveness declaration of the company’s Form 10 filing, regulatory approvals, a favorable opinion from counsel on the tax-free status of the spin-off, and final approval by the Board. Energizer was itself a spin-off from Ralston Purina, outperforming the S&P 500 by 42.6% and 31.8% over the first one and two years of regular-way trading, respectively, following the 2000 transaction.

The two segment heads will become CEOs of the respective companies. David Hatfield will serve as CEO of the Personal Care business and Alan Hoskins will be CEO of Household Products. Current ENR CEO Ward Klein will become Executive Chairman of Personal Care. The Personal Care business generates annual sales of about $2.6 billion. Leading brands include Schick shavers, Edge shaving cream, Playtex feminine products, as well as Banana Boat and Hawaiian Tropic sunscreens. Household Products includes Energizer and Eveready branded products as well as portable lighting products. The business generates annual revenue of approximately $1.9 billion.

Battery sales have been relatively stagnant over the last three years, likely masking modest growth for hygiene products. Notably, other personal care product manufacturers, such as The Proctor & Gamble Co. (NYSE: PG), Kimberly-Clark Corp. (NYSE: KMB), Unicharm Corp. (8113 JP), and L’Occitane International (973 HK) trade at significantly higher multiples (on average 2.4x EV/sales) than Energizer (1.7x EV/sales, prior to this morning’s announcement). ENR acquired a significant portion of its personal care business in 2008 through the acquisition of the Playtex Products Inc., which included the Banana Boat sunscreen business, for $1.9 billion, or 2.6x trailing sales. Applying the peer group 2.4x to Personal Care annual sales of $2.6 billion provides an enterprise value of $6.2 billion.

The Household Products business with its heavy exposure to consumer battery sales has no pure-play comparable. The closest publicly-traded peer would be Spectrum Brands Holdings Inc. (NYSE: SPB), the maker of Rayovac batteries, as well as George Foreman grills and Farberware home appliances, amongst other diversified home goods, which trades at 1.7x sales. Applying that multiple to Household Products annual sales of $1.9 billion, one may derive an enterprise value of $3.2 billion. Of course, one may note that SPB may trade at a premium to ENR due to the strength of its product mix.

On April 29, 2014, Alliant Techsystems Inc. (NYSE: ATK) announced a merger agreement with Orbital Sciences Corp. (NYSE: ORB). ATK shareholders will own 53.8% of the combined Orbital ATK following the merger. Immediately prior to the transaction, ATK will spin off its Outdoor Sports segment into a separate publicly traded company through a tax free distribution of shares to ATK shareholders. The spin entity will distribute $300 to $350 million to ATK in conjunction with the spin-off transaction. The potential to unlock ATK shareholder value through the separation of the Outdoor Sports business has been highlighted in The Spin-Off Report Radar Screen.

The merger is expected to be completed by the end of 2014 pending regulatory approval and shareholder votes. The spin-off still requires a Form 10 filing, an effectiveness declaration from the SEC and final Board approval. ORB shareholders will receive 0.449 shares of ATK for each share of ORB. David Thompson, CEO and Chairman of ORB, will serve as CEO of Orbital ATK, while General Ronald Fogleman, Chairman of ATK, will remain as Chairman of the combined entity. ATK CEO Mark DeYoung will become CEO of the spin entity.

ATK Sporting Group provides ammunition, firearms, binoculars, holsters and other accessories for hunters and members of law enforcement. In November 2013, ATK purchased Bushnell Group Holdings Inc. for $985 million, adding about $600 million in annual sales. Bushnell makes rifle scopes, trail cameras and other equipment for hunting enthusiasts. ATK has invested in this business since entering the commercial ammunition market in 2011. The sporting segment has provided steady cash flow as US Defense spending has been reduced in recent years. ATK has paid about 1.6x sales for recent purchases in this segment, including Bushnell and Caliber Company, the maker of Savage Arms.

Outdoor Sports generated $2.2 billion in revenue and $361 million in pro forma EBITDA in 2013. Applying the 1.6x average acquisition price to $2.2 billion in annual sales would value the business at $3.5 billion. However, if compared to firearm manufacturers, such as Sturm Ruger & Co. (NYSE: RGR), which trade about 6x trailing EBITDA, the value is only about $2.2 billion.

Orbital manufactures satellites and launch vehicles, as well as missile defense systems. ATK Aerospace and Defense produces rocket propulsion, defense electronics systems and ammunition. Pro forma combined EBITDA totaled $585 million in 2013. Management expects cost and revenue synergies to add $40-65 million annually to operating income. A peer group, including Raytheon Co. (NYSE: RTN) and L-3 Communications Holdings (NYSE: LLL), trade about 9x 2013 EBITDA. Applying the peer group multiple to an EBITDA range of $585 million to $637 million (the mid-range of projected synergies) results in an enterprise value range of $5.3 to $5.7 billion. ATK shareholders will own about 53.8% of the combined entity, or approximately $3 billion.

On April 28, 2014, Comcast Corp. (NASDAQ: CMCSA), an operator of cable television systems, announced that in an effort to complete the previously announced acquisition of Time Warner Cable Inc. (NYSE: TWC), the company will spin off 2.5 million subscribers into a new entity via a tax-free distribution to shareholders. In addition to the spin-off, CMCSA also announced the sale of 1.4 million subscribers to Charter Communications (NASDAQ: CHTR), and an asset swap of 1.6 million subscribers with CHTR. The purpose of the three transactions is to reduce the total number of post TWC acquisition subscribers to below 30% of the total national subscriber base to comply with federal regulations. Timing of the spin transaction was not disclosed. The company hopes to have a review of the three transactions completed by the end of 2014.

The spin entity, which has yet to be named and is currently being referred to as SpinCo, will own 2.5 million cable subscribers located in Michigan, Indiana, Minnesota, Illinois, Virginia, Tennessee, and Alabama. SpinCo will enter into a management agreement with Charter Communications, where CHTR will receive a fee for managing the company’s operations. Following the transaction, CMCSA shareholders will own 67% of the new spin company, while CHTR will own the remaining 33%. SpinCo shareholders will receive CHTR shares representing 13% of Charter in exchange for the company’s 33% ownership in SpinCo. The spin entity is expected to have annual EBITDA of approximately $2.0 billion and be leveraged at roughly 5.0x EBITDA. According to management, the Spinco transaction is being valued at 7.125x 2014 EBITDA, or $14.3 billion in enterprise value.

The cable industry is going through a period of consolidation. The remaining peer group include Cablevision Systems Corp. (NYSE: CVC), Comcast, and Time Warner Cable. In addition, Liberty Media Corp. (NASDAQ: LMCA) holds a 24.9% stake in CHTR. It has been widely reported in the media that John Malone, Chairman of LMCA, who famously led a wave of consolidation within the cable industry during the 1980s and 1990s, would like to see further M&A activity in order to exert leverage over rising content costs.

The peer group currently trades at 7.6x 2014 consensus EBITDA. Applying that multiple to the expected $2.0 billion in SpinCo 2014 EBITDA results in an enterprise value of $15.2 billion. Alternatively, a value for SpinCo can be derived on an EV/subscriber basis. The peer group currently trades at roughly $5,400 per subscriber. Applying that multiple to SpinCo’s subscriber base results in an enterprise value of $13.5 billion. Averaging the three valuation techniques, one may derive an EV of $14.3 billion for the spin entity through this rough, preliminary exercise.

On April 17, 2014, after the market close, SLM Corp. (NASDAQ: SLM), commonly known as Sallie Mae, updated information for post-spin entities SLM Corp and Navient Corp. Shares of Navient will be distributed after the market close on April 30, 2014, with regular way trading scheduled to begin on the NASDAQ on May 1, 2014, under the ticker “NAVI”. Shares of NAVI will be distributed on a 1:1 basis to SLM holders as of April 22, 2014. Navient began trading on a “when-issued” basis under the symbol “NAVIV” and Sallie Mae under the symbol “SLMVV” on April 17.

NAVI’s loan portfolio will include about $103 billion in Federal Family Education Loan Program (FFELP) loans, $31 billion in private education loans, and $7 billion of other interest-earning assets, as well as a federal loan servicing platform. FFELP was eliminated in 2010 through the passage of the Health Care and Education Reconciliation Act, as a result of which the government replaced private lenders in extending federally backed loans to students. Therefore, most of this portfolio is in run-off mode, will amortize over 20 years, and presents opportunities to return capital to shareholders.

The parent company will retain the Sallie Mae moniker and will transform into a traditional consumer finance bank, with a focus on funding private education loans. Sallie Mae Bank is a branchless entity that accepts deposits to fund student loans and will remain with the parent company. In addition, SLM will offer some student-focused insurance products. Given a relatively small current asset base, and the ability to expand that base approximately 20% annually in the near term, separating the banking operations should allow greater visibility into SLM’s growth opportunities.

The fair value estimate for NAVI of $15.16 per share remains intact. Please see the FLASH note published on April 10, 2014, for further information on Navient’s valuation. Based on the updated Sallie Mae investor presentation, the fair value estimate for post-spin SLM has been revised to $10 per share (from $11.44). The updated valuation is a result of management’s revised expectation for ROE of 15%+ versus the prior guidance of 16% to 20%. The P/E multiple was increased to 16.1x (previously 16.0x) to reflect the current average forward multiple of a broad group of regional banking companies. Applying a 15% ROE and peer group P/E multiple to the current book value results in a fair value of $9.83. This valuation exercise implies a price to book ratio of 2.4x, which is below the 2.5x average price to book ratio for regional banks with ROEs exceeding 13%.

Alternatively, applying a 2.5x P/B multiple to SLM’s book value results in a $10.18 per share estimate. The average of the two valuation exercises is $10 per share. Shares should be expected to initially trade at approximately this value. If post-spin SLM were to generate return on equity in excess of 15% upside to this fair value would exist. Please see the initial SLM Corp. Spin-Off Report (February 11, 2014) and FLASH note (April 10, 2014) for further details.

On April 11, 2014, Vornado Realty Trust (NYSE: VNO), a commercial property Real Estate Investment Trust (REIT), announced plans to spin off its shopping center operations through a tax-free distribution of shares to VNO shareholders. The spin entity, which will also be structured as a REIT, will consist of 81 strip centers and four malls. Following the separation, VNO’s portfolio will largely consist of office properties and street-level retail space in New York and Washington, D.C. The transaction could be compared to the 2012 spin-off of Rouse Properties Inc. (NYSE: RSE) from mall owner and operator General Growth Properties Inc. (NYSE: GGP) and the planned 2014 separation by Simon Property Group (NYSE: SPG) of its strip centers. These transactions have the potential to unlock shareholder value through multiple expansion for the remaining more visible and valuable properties in the parent portfolio and the opportunity for the spin entity to invest in the weaker assets, which typically generate lower returns. Under the current corporate structure, it is likely VNO’s capital is being diverted to higher-return assets, which could prevent the strip malls from generating a better rate of return. Jeffrey Olson, currently CEO of shopping center REIT Equity ONE Inc. (NYSE: EQY), will become Chairman and CEO of the yet-to-be-named spin entity. Steven Roth, Chairman and CEO of VNO, will also serve on the spin entity’s board. The transaction is expected to be completed in 4Q 2014, pending the filing of a Form 10 and an effectiveness declaration by the SEC, approval for listing of the spin entity by a major exchange and final Board approval. VNO expects its current $2.92 per share annual dividend will be maintained through a combination of the two entities post-spin dividends of the post spin entities. VNO management will host a conference call at 10 am on April 14, 2013, to discuss the transaction.

The spin entity’s portfolio of 85 retail properties total approximately 16.1 million square feet with an average occupancy of 95.5% as of year-end 2013. VNO management has guided for 2014 net operating income (NOI) of approximately $200 million for spinco. Applying the strip center peer group capitalization rate of 6.3%, results in a valuation of $3.2 billion.

In addition to the office properties and street retail space, the parent will retain and attempt to dispose of 20 small retail properties valued at about $100 million. Two other properties are already under contract for sale (Beverly Connection and Springfield Town Center) for a total price of approximately $725 million. Assuming a 35% tax rate on the dispositions (the tax basis of the properties has not been disclosed), adds $536 million to the parent’s enterprise value. The New York and Washington, DC properties generated EBITDA of $1,284 million in 2013. Applying a peer group 22.1x multiple to trailing EBITDA values those properties at $28.4 billion. This results in a SOTP for post-spin VNO of $28.9 billion.

Based on this rough, preliminary exercise, a pre-spin enterprise value of $32.1 billion can be derived for VNO.