Two weeks ago, in previewingBurlington Coat Factory's (NYSE:BCF) fiscal Q2 2006 earnings report, I mentioned that the company's share price had reached the point at which it no longer moved much in relation to the underlying business's performance. Rather, the share price was dictated more by the likelihood and value of a potential buyout of the company.

A couple of days later, in the aftermath of the earnings report, fellow Fool Stephen Simpson was generally unimpressed with the news. Citing slow growth, "mediocre return on capital," and margins that were "nothing special," he concluded that the firm probably wasn't worth an investor's time. Yet the shares went up. Why?

Today, we learned why. After more than six months of searching, investment advisor Goldman Sachs (NYSE:GS) finally found a strategic buyer for Burlington. Private equity firm Bain Capital will be taking Burlington private at $45.50 per share, a price that values the company at just under $2.1 billion.

Now, I won't speculate on why the company's share price spiked nearly 10% before today's buyout was even announced. Maybe someone knew, and acted on, material non-public news. Or maybe Wall Street just guessed lucky. Why, it could even be that someone up there saw better news in Burlington's earnings release than either Stephen or I discovered, and determined that the business was worth investing in on its own merits. I don't know, and I won't speculate.

Rather, I'd like to take what we do know and figure out how we, as individual investors, can use it in the future. Whenever a buyout like this one occurs, it gives us a glimpse into how private-equity funds value companies as businesses, independent of the prices attached to their stock tickers. In Burlington's case, we have a company that an arm's-length buyer is valuing at $2.1 billion. The business has $3.4 billion in trailing annual sales and $111 million in trailing net profits. With those numbers, you can guesstimate the value of similar companies -- how much they might be worth to a willing buyer.

For example:

Price-to-Sales

Price-to-Earnings

Burlington

0.6

18.9

TJX (NYSE:TJX)

0.7

19.6

Ross Stores (NASDAQ:ROST)

0.9

24.5

Kohl's (NYSE:KSS)

1.2

19.1



So you can see that, among this group, Burlington is the cheapest of the bunch, even at its buyout price of nearly twice of what the shares were trading for a year ago. Will any of the others become targets for the insatiable private-equity beast? Stay tuned to Fool.com. If we hear anything, we'll be sure to let you know as soon as possible.

Fool contributor Rich Smith has no position in any of the companies mentioned in above.