Price per share in m Market Cap EBIDTA Debt Cash Enterprise Value

PERRIGO TARO 105.68 9860.00 593.15 1510.00 531.41 10838.59

TARO** 44.53 1980.00 222.69 46.11 242.72 1783.39 44.53 1980.00 318.00 44.7 258.8 1765.90

SUN's Offer 24.5

TEVA 45.08 42460.00 4174.00 14520.00 1100.00

876.15

55880.00

EV/EBIDTA

18.27

8.01

5.55

2.76

13.39

Operating Margin%

17.79

40.33

50.3

16.98

Debt/Equity ROE EPS

58.39 25.99 3.7

7.88 38.61 4.11

65.4 12.5 3.09

P/E

28.56

10.83

14.6

Note: Price based of April 20th closing All data TTM Taro** indicates analysis based of materially higher Annualized Q4 2011 results

What does this indicate ?

Indicates TARO is significantly mispriced in the market (reasons explained later). Roughly 40% of TEVA's current earnings constitute Brand Copaxone's earnings, which is slated to become generic in 2014. If TARO were to trade based of Perrigo's market multiple , From 2011 earnings, it should be ~$96 per share. From Q4-annualized earnings, it should be ~$135 per share. Higher Operating margin indicates the strength of Taro's business and the limited competition it enjoys for its products. Hence TARO deserves much higher market multiple Taro's Debt/Equity is <13 times Perrigo. Perrigo is highly leveraged. Taro carries almost zero Financial risk and has significant leeway to grow organically & inorganically in future by taking on Debt. Hence Taro deserves higher market multiple than Perrigo

Roughly 40% of TEVA's current earnings constitute Brand Copaxone's earnings, which is slated to become generic in 2014. Hence Teva is trading at lower market multiple . Taro is severly mispriced in the market http://www.bloomberg.com/news/2012-01-02/teva-says-jeremy-levin-named-to-succeed-shlomo-yanai-as-ceo.html

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