NEW YORK (The Deal) -- H.J. Heinz's blockbuster deal to absorb Kraft Foods Group (KRFT) at a valuation of about $55 billion works out to a multiple of nearly 23 times Kraft's earnings before interest, taxes, depreciation and amortization. It looks like Heinz paid too much.

That valuation is based on Kraft's market cap of about $36 billion at Tuesday's closing stock price of $61.33 per share. It includes the almost $10 billion dividend that will be paid to Kraft shareholders, as well as the approximately $10 billion in debt held by the company and its nearly $1.3 billion in cash. The figure demonstrates that multiples in the space are not just escalating for providers of natural and organic food products, but also for processed food companies in general. Has Heinz now pushed that dynamic too far? Maybe.

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A multiple of 23 times Kraft's nearly $2.4 billion in EBITDA, as estimated by Capital IQ, compares with the about 14 times EBITDA private equity firm 3G Capital and Berkshire Hathaway (BRK.A) - Get Report paid for Heinz itself in 2013.

It also exceeds the lofty 18 times-EBITDA multiple Tyson Foods (TSN) - Get Reportshelled out for refrigerated meats brand Hillshire Brands last year. The acquirer was accused of overpaying for that brand, beating out JBS affiliate Pilgrim's Pride (PPC) - Get Report in a heated public auction.

To justify the price tag, 3G-backed Heinz has set what even it described as an aggressive target of $1.5 billion in annual cost savings by 2017. Added to the roughly $2.6 billion in EBITDA Heinz generates and the $2.4 billion in EBITDA Kraft generates, that could lead to total EBITDA of $6.5 billion.

With each share of Kraft's nearly 590 million share outstanding equating to a share in the newly formed Kraft Heinz Co., and with those shares accounting for 49% of the total shares in the combination, the merged company will have about 1.2 billion shares outstanding. Berkshire Hathaway, which holds 52% of Heinz, will own nearly 320 million shares in the new company, according to Berkshire Hathaway CEO Warren Buffett, who spoke with I Wednesday morning. 3G, which owns 48% of Heinz, would hold about 290 million shares in Kraft Heinz.

Using Tuesday's closing price for Kraft and its market cap of $36 billion, Kraft Heinz would have a total market cap of about $73 billion and an enterprise value of about $100 billion, or 20 times the total EBITDA Kraft Heinz currently generates of $5 billion and about 15.5 times the $6.5 billion in EBITDA expected to be generated by 2017, which includes cost savings. That 15.5 figure looks a lot better next to Heinz's 14 and especially Hillshire's 18.

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But is it reasonable to expect Kraft Heinz to hit its "aggressive" targets? These are two slow-growth companies facing lower volumes, consumers unwilling to pay higher prices for processed foods and higher commodity prices. Those difficulties make the goals extremely aggressive.

John Cahill, Kraft's CEO who will become vice chairman of the new entity, surely understands the problems. He said the company will review its entire portfolio in response to a question on a conference call about whether some brands could be jettisoned. At the same time, executives say they plan to use Heinz's global infrastructure to promote the Kraft brand around the world.

Also mitigating the high price: The deal does not involve saddling the company with more debt, which would have been a tall order considering that the combined entity will have total debt of $28 billion. The debt figure was provided by Heinz CFO Paulo Basilio during the Wednesday call. And the company will use cash flow to reduce its debt by about $2 billion within two years.

Instead, existing debt will even be refinanced to help lower interest costs, according to an investor presentation. And 3G and Berkshire Hathaway will essentially take Heinz and their stakes in it public as part of the transaction. 3G and Berkshire Hathaway are sinking $10 billion of equity into the deal to fund the dividend.

Still, cheaper targets were available. For example, Campbell Soup (CPB) - Get Report has an enterprise value of $17.8 billion based on a market cap of about $14.1 billion, cash of about $200 million and debt of close to $3.9 billion, a multiple of roughly 11.9 times the around $1.5 billion in EBITDA the company is generating on an annual basis.

ConAgra Foods (CAG) - Get Report boasts a market cap of nearly $15 billion, has about $120 million in cash and nearly $8.5 billion in debt, equating to an enterprise value of close to $23.4 billion, a multiple of about 10.6 times EBITDA of around $2.2 billion generated over the 12-month period ended Nov. 23.

Both companies produce well-known brands and either would have been easier to digest. On the other hand, Warren Buffett has done quite well with his idiosyncratic diets.

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