Aimia Inc T.AIM.PR.D

potential catalyst tomorrow - May 9th

[DaneOddments]

May 9th is the date that Paladin's options to buy up to 20% of Tufropes and Bozzetto expire.  Although Aimia could grant an extension, they would only do so if Paladin requested it and seemed likely to make use of it.

I'm thinking that Paladin doesn't have the money, but Jefferies does, and since I believe my theory that Jefferies is the puppet-master here, if they (Jefferies), like either of these deals, they will invest in Paladin so that Paladin can exercise their option on one or both.

Would be a good sign.  If not, perhaps a negative tell.

[Growthnvalue]

Didn't Aimia already state that Paladin decided not to exercise that option? They used that as justification for their "dire" cash needs to faciliate the private placement, no? 

[nkbourbaki]

Phil left the door open a crack at the Dec CMT hearing, saying Paladin *could* still exercise but they hadn't managed to raise a fund.  At the time I wondered if it was just a gambit to justify the PP.  But I'm not even sure Paladin is still operating and I don't think current Aimia mgmt is playing games.    Would be incredibly surprising if Paladin found $ and

[Growthnvalue]

Sooooo....there is a higher liklihood of my crossing paths with a unicorn at the petting zoo this weekend than there is of Paladin writing a check.

[DaneOddments]

I think if either deal is compelling, and either option is in the money, they could find the money rather than waste that in-the-money value, and I think Jefferies would either provide from their balance sheet or raise it for them.  Obviously, Tufropes is a huge question mark, but Bozzetto looks attractive, so my guess would be that they'd at least exercise the option on that one. 

[nkbourbaki]

I'm sure you're right that if the options had value then the $ would be found.  However Tufropes is a mess and the Bozzetto economics are okay but don't seem super compelling.  And remember that Paladin retains a carried interest in both co's so they effectively have a free upside option should either company actually perform well over the next 5-10 years.   I

[DaneOddments]

I think Bozzetto has proven itself a winner under current CEO Roberto Curreri since 2015, who has led it to double sales and triple EBITDA during the past 8 years.  So I think Bozzetto is probably worth more than the 7x or 8x EBITDA that Aimia paid (they got lucky because the fund that sold it was hitting end of its term and financing was just beginning to seize up).  Average specialty

[nkbourbaki]

Bozzetto looks okay and may prove to be a very good purchase if they can build the Americas business and really utilize NOLs etc.   It does seem that Curreri is a force to be reckoned with. However I don't see 7-8x late-cycle EBITDA at 15% margin as killer value, and I'm highly skeptical of Phil's "Aimia got lucky" narrative.  If this deal was on Paladin's

[DaneOddments]

I think Aimia should have focused on deals in Canada and the U.S., like they promised they would over and over again, until they sprung deals in India and Italy upon us, like "surprise! fooled you!" But, I do think they did get lucky with Bozzetto.  It was a weird moment in time, sometimes the planets do align, even for drunk drivers. For comps there's not much in the public

[nkbourbaki]

I fully agree that they should've focused on US/Can investments.   And if they couldn't find any, then return cash to shareholders.  Like they said they would.  Looking back, pretty much everything Phil told me in our few conversations turned out to be false. Nice to see the slow grind upward from the $2.30s into Q1 earnings.  Nobody is happy below $3 so hopefully

[DaneOddments]

Kognitiv I value at $0 because I still do not understand what they do (I am not a smart man) and they seem to be in constant need of cash.  Granted, the same could have been said of many venture capital stage investments that I wouldn't have understood or invested in that ultimately became huge successes, but I don't think Aimia should be investing further in cash-burning venture

[nkbourbaki]

Thanks for the pointer to Urbana.  I didn't know they were invested in Kognitiv, and also wasn't aware that they published such frequent updates on their holdings. Kognitiv has an enormous financial hole to dig themseles out of --- nearly $50m working capital deficit as of Dec 31 --- so I also value it at 0.  I also have no clear idea of what they do, aside from being pretty

[DaneOddments]

I'm not worried about Clear Media, as they are minority investor with some high quality partners like JCDecaux:   https://www.jcdecaux.com/press-releases/jcdecaux-completes-take-private-clear-media-limited-part-consortium-investors

[nkbourbaki]

Sure, but the same was true before the 50% writedown.  

[TheCount11]

There is no doubt a company like Kognitiv can have a wide range of values.   A pessimistic view like “AI will render Kognitiv obsolete” would value the company at zero.  An optimistic view would be “AI added to the Kognitiv system will make the company tremendously valuable”.  A middle of the road view would be “The company has been mismanaged however the data has tremendous

[DaneOddments]

I hadn't thought of the AI angle with Kognitiv.  That is intriguing.  Maybe change Aimia to AI-mia, call the roaring kitty / meme lord guy.  lol.  

[TheCount11]

The Aeroplan Program had subsidized a whole bunch of other customer insights businesses around the world over the years.  There were 11 global offices supporting over 40 markets with 2.8bn transactions per month and processing 18bn rows of data annually.  Very very high quality global commercial structured data.