A Valuation of Prince Edward Island Liquor Control Commission

Valuation of Crown Corporations, Crown Corporations, Ian Madsen

Prince Edward Island Liquor Control Commission (PEILCC) is the monopoly Crown corporation which controls and retails all beverage alcohol in Canada’s smallest province, Prince Edward Island. Using an intrinsic value method, and discounting to the present, PEILCC’s projected future free cash flows, as the
company is today, but taxed at statutory rates, the range of estimates is $217M to $1.52B, with a tighter range of a median (midpoint of the array of values) of $379M to a mean (simple average) of $478M.

Under the market-based valuation system, the current, ‘as is’—but now fully taxed-value ranges from $90M to $1.82B, with a mean (simple average) of $272M and a median (midpoint of the array of values) of $554M. 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: VS26_PEILCC-Valuation_MY1619_F1