Apollo Healthcare Corp Warrants (03/01/2022) APHWF

Zombie comes to life

[zalmonella]

Given $50M of the value is in cash, (and expected to be $59M in a few days once results are released) it seems Anjac paid $268M for a plant that was built for $80M and some inventory. One has to wonder what else was the intrinsic business line that was so desirable as to pay over market for it?  I don't suspect any skulduggery, but there's nothing in AHC to warrant this.  Maybe some bonus land value when the highway goes through?  Who knows?

In any case, it shows the riskiness in averaging down ordinary businesses without wide moats. I made it through this time, but it's a far cry from where I started a year ago at $4.25. Averaging down in the $2s has helped but for those who think $1.50 was a deal too good to pass up, I'd only ask what was your thinking? without this lifeboat, that could have been dead money for another year or more.

[cpeczek]

I think Anjac wants to have more business in North America. They do essentially what Apollo does in Europe but with cosmetics as well. It makes sense because they would be buying Apollo's existing contracts with major North American retailers and can offer new private label products. Apollo's facility is underutilized and they were already profitable and trading at a discount. This deal

[zalmonella]

Yes, I don't quite know what Anjac does, so your thoughts are helpful. And of course to buy an operating and under-utilized plant makes some sense, but not for the price they paid.  If you assume an undepreciated value of $80M for the plant - the cost they built it for - that means the contracts and the relationships are worth $180M.  I don't see anything else of value in the

[cpeczek]

They make private label cosmetics and skin care products in Europe. The AHC insiders didn't take their full amount in cash they took Anjac shares instead and with land appreciation and supply bottlenecks building a facility like that would cost way more than 80 million now. They would be out building it for 2-3 years then when they are finished they would have no customers here. The way Anjac