Rede Energia Participacoes was one of the largest private companies in the Brazilian power sector, headquartered in São Paulo. Its business model consisted of shareholding and control of a portfolio of electric utility companies. The main activities of its subsidiaries were focused on the distribution and sale of energy to residential, commercial, and industrial consumers, although it also had stakes in generation and transmission. The company had a wide geographic presence, controlling distributors in states such as Mato Grosso (Cemat), Tocantins (Celtins), Mato Grosso do Sul (Enersul) and São Paulo (Caiuá, Bragantina, Nacional). After facing a serious financial crisis that led to a legal reorganization, the company acquired its shareholder control by Energisa S.A. in 2014, which incorporated its assets.
Market capitalization, or "market cap", is the aggregate market value of a company represented in a dollar amount. Since it represents the “market” value of a company, it is computed based on the current market price (CMP) of its shares and the total number of outstanding shares.
Enterprise value (EV) measures a company's total value, often used as a more comprehensive alternative to equity market capitalization. EV includes in its calculation the market capitalization of a company but also short-term and long-term debt and any cash or cash equivalents on the company's balance sheet.
The enterprise value-to-revenue multiple (EV/R) is a measure of the value of a stock that compares a company's enterprise value to its revenue. EV/R is one of several fundamental indicators that investors use to determine whether a stock is priced fairly. The EV/R multiple is also often used to determine a company's valuation in the case of a potential acquisition. It's also called the enterprise value-to-sales multiple.
The enterprise value to earnings before interest, taxes, depreciation, and amortization ratio (EV/EBITDA) compares the value of a company—debt included—to the company's cash earnings less non-cash expenses. It's best to use the EV/EBITDA metric when comparing companies within the same industry or sector. Typically, when evaluating a company, an EV/EBITDA value below 10 is seen as healthy.
It follows the same logic as the EV/EBITDA indicator, but instead of EBITDA, EBIT is used, which considers non-cash D&A expenses in the company's operating result.
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