Bullboard - Stock Discussion Forum SOL Global Investments Corp C.SOL

Alternate Symbol(s): SOLCF

Healthcare Biotechnology

SOL Global Investments Corp. is a Canada-based diversified international investment and private equity holding company, which is engaged in investing in small and mid-cap sectors. SOL Global provides growth capital to small and mid-sized businesses. The Company’s investments range from minority positions to strategic holdings with active advisory mandates with an objective of providing... see more

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SOL Global Investments Corp > Response to a Valuation of Sol CF Shares

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Post by jthottam on Feb 15, 2021 11:15pm

Response to a Valuation of Sol CF Shares

From what I can tell, the range on the street is $6 - $10/Sol Share (it all depends on the trading value of Verano and the results of the litigation).

If you assume that Verano trades on par/median with its peer group....than it will be a little less than $10.

To put it in perspective:

@Verano Share price of $20 per share (the Low End of the Peer Group with Verano at $20/share) - Sol's Share is worth $504MM (Post Tax of $403.2MM)

@Verano Share price of $32 per Share (Median of Peers with Verano at $32/share) - Sol's Share is worth $806MM (Post Tax of $645.12MM)

If you then add in the Bluma Post-Tax Value of ~$75MM (assuming the deal closes)

+ If you add in the Post-Tax NAV of the remaining portfolio companies of $28MM

and then Deduct the Debt, Accrued Interest, Payables, Liabilities of ~$65MM

You end up with a Post-tax Range of $441.2 to $683.12MM

Using ~72MM Fully Diluted Shares (which includes the new comp plan) this translates to a post-tax value range of $6 - $9.50.

If you treat it on a pre-tax basis, its closer to $8 - $12 / Sol Share.

However, if Sol trades towards the higher end of its peer group (which it may given its higher EBITDA margins, broader multi-state footprint, larger revenue growth rates, and stronger State moats in restricted licensures), than it would trade on a:

- pre-tax basis closer to $47/share - Sol's Share is worth $1184.4MM (Post Tax of $947.52MM)

with all the other additions/subtractions yielding a

high-end post-tax basis of $985.52MM or, equivalently, $13.68/sol share or, alternatively

on a pre-tax basis of $17/sol share.

Hope that puts things into perspective and helps you understand possible ways to triangulate on the valuation on a:

pretax basis of $8 (low-end), $12 (Median-end) and $17 (High-end)

Post-tax basis of $6 (low-end), $9.5 (Median-end) and $13.68 (High-end)

There is of course pending litigation with a lender (i.e., 1235 Fund) that, if Sol loses, can also reduce all the above values by:

~$90MM or $1.25/share (on the low-end of Verano at $20/share)

- $135MM or $1.875/share (on the median-end of Verano at $30/share),

- $166.5 or $2.3125/share (on the high-end of Verano at $47/share)

I know that's a lot to absorb, but, with a bit of luck, it will give you the levers and numbers to think about as you triangulate on what the value of Sol Global should or could be.

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