A Valuation of New Brunswick Liquor Corporation

Valuation of Crown Corporations, Crown Corporations, Ian Madsen

New Brunswick Liquor Corporation (NBL) is the monopoly Crown corporation which controls and retails all beverage alcohol in the province of New Brunswick.

Using an intrinsic value method, and discounting to the present, NBL’s projected future free cash flows, as the company is today, but taxed at statutory rates,
the range of estimates is $1.56B to $10.9B, with a tighter range of a median (midpoint of the array of values) of $2.73B to a mean (simple average) of $3.51B.

Under the market-based valuation system, the current, ‘as is’ – but now fully taxed-value ranges from $519M to $15.3B, with a mean (simple average) of $2.16B and a median (midpoint of the array of values) of $4.15B. Seven of eight available valuation metrics were usable. It needs to be emphasized that these values are all on the optimistic side, as the company has monopolistically high profit margins which may not be allowed to continue were the company to be divested.

Read the entire Valuation here: VS29_NBL-Valuation_FB2719_F1