Mead Johnson Nutrition Co. (NYSE:MJN)

TMFDitty (99.57) Submitted: 2/12/2009 12:13:14 PM : Start Price: $25.80 MJN Score: -122.55

Taking a first cut at the new IPO, I get 30 million shares x a $26.40 share price = $790 million initial float. BMY is keeping 85% of the company, so call the total market cap 7x that, or $5.5 billion. Tack on $2 billion in debt, and we've got us here a $7.5 billion company with roughly $380 million in trailing free cash flow -- so an EV/FCF of 20.
I'd want to see the company growing at 20%-plus to justify that price. But according to Capital IQ, its actual profits growth rate over the last three years has been something closer to 5%.
In short, I'll pass.