RE:salePrior to sale company had about $31M USD in normalized cash (cash less excess AP of around $23M). Add in a conservative $39M from the sale (accounting for transaction costs and one time severance costs associated with the restructuring) and you have a total net cash balance of $70M USD or $90M CAD.
The market cap of the company at today's close of 0.41 was about $114.4M CAD, so enterprise value after the deal closes should be just $24.4M CAD or roughly $19M USD.
Against this enterprise value you shoud have a business that does about $74M USD in 2017 revenues. So you have a $75M/year revenue company in what should be a very high growth space trading at about .25 EV/Revenues
In theory, .25 EV/Revenues should be very cheap for a pure play OTT services company, however the remaining company will most likely still be losing money, probably as much as 1-2M more per quarter than before because most of the DIVX revenue was high margin IP iicensing revenues. (That's what the cost cuts most likely are going to try to address).
The key for NLN's stock will be if they can reignite growth in the core OTT streaming business. That should be much easier in 2018 with the NHL and other US client losses mostly all anniversaried in 2017, but management will have to deliver on its promise of new client wins before anyone gets too excited.
As an aside, I agree this makes the company a more attractive acquistion as any acquirer with a large sales force in the same space (such as a CDN) could easily see how they could NLN's SG&A significantly and have the company throwing off significant EBITDA fairly easily.
This acquisition potential combined with the large cash position and very low EV should put a floor in the stock for now. Thankfully, I don't think we will see sub 0.40 again, unless the company loses another marquee customer such as the UFC, NFL or NBA, which unfortunately can't be ruled out as a possibility.
I would expect a nice short term pop in the stock here as the sale probably demonstrates more value in the DIVX assets than expected, but for the stock to recover much more the company is going to have to deliver on the promises of meaningful new cusotmer wins
FWIW, at 0.55 the post deal stock would trade at the same EV/rev multiple as before the deal, but given how many times they have disappointed I think that 0.55 may be stretch in the short term. I guess we will see!