- Sodastream (SODA +9.5%) still sports healthy gains but are well off earlier ~25% gains, as Stifel analyst Jim Duffy pours cold water on speculation that P-E firms are considering taking the company private at $40/share.
- The analyst crunches the numbers and concludes such a move would be "highly improbable to impossible," believing use of debt to finance an LBO would be imprudent given the leverage to fund the total amount of the deal would put the ratio of debt to trailing EBITDA at greater than 9x.
- Duffy also says SODA's business model has a poor track record for cash flow generation given capital investments in manufacturing and CO2 cylinders and the working capital intensity of the business.
- Stifel is maintaining a Sell rating on the stock.