Post by
Newtrader606 on Aug 24, 2016 1:04pm
Press release info, Tst traded for Pli shares.
What this is saying is they are paying 43 million for 90 mill in tax credit land and cash! It's also saying there is a 3x up potential imo at PLI
ProMetic announced the acquisition of Telesta Therapeutics (TST-T, not rated). PLI will pay $0.14/share or ~$42 million, payable in PLI stock. The shares are expected to be paid to TST shareholders upon closing in early-to-mid November. As per its last quarterly filing, Telesta had $42 million in cash, essentially break-even operationally and ~$7 million due to the Ontario government. Consequently, ProMetic expects to receive $34 million in cash from the transaction and not increase its burn. Furthermore, we believe there is potential that the Ontario government could convert the loan to a grant (ie. PLI keeps employment in the region), which would imply the company would get $42 million in cash. In other words, PLI is paying $42 million in stock to receive $42 million in cash. From a proforma cash perspective, PLI ended its last quarter with $64 million. Coupled with the $34 million (and perhaps $42 million) from the TST acquisition and the anticipated $21 million from warrant expiry in February 2017, PLI has up to $127 million in cash or 14+ months at its current burn rate. In other words, we believe the risk of a near-term financing is now firmly off the table. In addition to the cash, PLI receives 8.5 acres of land in Belleville and a 150,000 square foot facility. The plant is on TSTs books for $8 million, albeit management indicated its value to be $30-$40 million. All told therefore, PLI paid $42 million in stock for up to $82 million of value, in essence paying $0.50 for $1.00. Furthermore, given that PLI is paying in shares in November and we expect more positive clinical date including the filing of the BLA for Pg, those shares could be issued materially above the current share price, which would lower the cost to PLI. From a strategic perspective, the facility in Belleville will act as a fill and finish (ie. put in vials) for its bulk active plasma proteins, which will increase efficiency of its Laval and Winnipeg plants. Furthermore, given the extra room (ie. Belleville plant is larger than Laval and Winnipeg combined), management indicated that it could add another PPPS line there, perhaps by 2020. While early in the planning process, a plant of such size could enable 400,000 litres of plasma capacity, or double the current capacity of Laval and Winnipeg. We believe this is a tremendously-accretive transaction from not only from an immediate cash perspective but also from a longer-term revenue perspective. Maintain Buy and $10.00 target price.
Comment by
vega509 on Aug 24, 2016 1:28pm
most don't see that, or don't want to see it. this deal is a complete give away of shareholder money. selling the plant, and the cash on hand come to far more than $0.14/share.
Comment by
Newtrader606 on Aug 24, 2016 1:30pm
I aggree I was thinking by February I was gonna get 40c per share but im just happy that we get better Managment and in to a company with some acctule products in there pipeline!
Comment by
Whatamidoing1 on Aug 24, 2016 4:24pm
You need to do better research before you buy a company's shares
Comment by
Jsop on Aug 24, 2016 1:36pm
Sold 42000 tst and bought 2000 PLI @ 2.85 because I strongly believe PLI november price to be much higher, $4 est. at which point I would only get 1400 (1470) shares. Basically if you believe PLI will be worth more in november than in august then do the TST for PLI trade.
Comment by
Newtrader606 on Aug 24, 2016 1:55pm
i sold my 1.5 million for 73500 PLI only time will tell if we should of held Tst or if we made the right move!