2242749 Ont Ltd. AIIFF

Takeout target or Receivership?

[Johnnycomelate]

I have been reading the posts on here over the past few days. The think the posts about Armtec being a failing business from the revenue side of the equasion are a little early considering their revenues have been quite stable over the past few years. The Drainage business has been substituted by the precast business so is this the direction the company intends to go by eventually folding up the drainage business and focusing on precast? Who knows for certain.

I think the real issue at hand right now is the massive debt. The company actually had an EBITDA of about $40M last year but paid out over $32M in interest and another $8M in Cap Ex netting the company nothing. I cannot see how the company will ever get out of debt unless they sell shares into the market or do a private placement and use the money to pay down the Brookfield debt of $100M. Until this happens the company will have to take on more debt when they have a bad quarter which will increase the interest payments and the circle will continue. Heard this story before... Ummm probably the US debt clock? LOL

Valuing the company based on an EBITDA of $40M at 4 times would make the company worth about $160M as a take over target but with a negative Equity (stripped of Goodwill and intangables) of approximately (-$100M) would mean lowering the value of $160M down to $60M. Currently trading at $25M it could mean a jump in the stock price of about 1.5 times to get the $60M market cap. Therefore I'd say a take out price could be as much as $2.40. Now the only way this stock ever see's $2.40 again is strictly as a take out target. Otherwise this company will only end up in the hands of Brookfield in receivership.

[BearBullBrian]

Your last sentence sums up the objective of this company since Brookfield bailed them out. BBB

[Thethruthhurts]

Both the eastern Canadian drainage business and precast business are ancient assets and barely produce compliant product. The paving stone and septic tank business do fill a niche however with the heavy investment in capital equipment by competitors the clock will strike midnight for it too in the very near future. The sound barrier fence was a gold standard but they too are under severe margin

[Thethruthhurts]

Thought about this a few times this weekend....I still don't think anything can be done unless.....Brookfield comes to the plate and structures an ownership deal that allows for reinvestment in Armtec itself. The company is essentially insolvent in having to perform for the Brookfield debt. Let Brookfield take the stock in....exchange it at 10 to 1 for shares in the Newco -- Brookfield

[Thethruthhurts]

Fact: Currently there are 24.1m outstanding shares with a market cap of $26.2 million. After the dismal Q1 showing that was based on the weather -- this was the message from Armtec HQ Company president and CEO, Mark Anderson, commented on the financial shortfall, “Despite the challenging start to the year, management remains focused on delivering improved earnings in the second half of 2014

[llennn]

Hello Hello Hello anyone here anyone here anyone here a turd can float a turd can float a turd can float i joke i joke i joke