Avante Corp V.XX

XX and SSC halted

[mlmack]

Better deal for XX from SSC or is Fairfax going to take it out ?

[mlmack]

So they sold Logixx and kept the high margin residential division. Also cleaned out the old board, impressive new board including Dragon Wes. Looks like a new company with cash !!!

[Possibleidiot01]

" meet the new boss , same as the old boss?" I mean the previous bosses to alter The Who lyric just a little.

[nkbourbaki]

What a strange situation. In 2019, the first tranche of Fairfax debentures financed the purchase of ASAP to build out the Logixx platform.  A second tranche never materialized, which was understandable given that COVID turned the world upside down. Now, 3 years later, Fairfax converts their debs above FMV to block a sale of the whole company and instead back a sale of the Logixx division

[deleuze68]

The Fax Capital disposal I believe happened before the original buyout announcement as they received $1.35/share. I'm thinking it was done privately. The Logixx business has deteriorated significantly over the last 3 years. Margins sinking, growth plateauing, and just too much competition. Once you take out the higher margin boost it received due to Covid security work it is barely profitable

[Possibleidiot01]

Any opinion on whether Fax Capital broke even , lost money or made money?

[hevin]

Where was it disclosed that Fairfax disposed at a $1.35? To me it doesn't make sense as they would have taken a 20-cent loss. Do you have a link to that? However I agree with everything you said after that LOL

[deleuze68]

Not Fairfax but Fax Capital. Fax Capital had purchased 2 million shares last year at $1.75 but recently disposed of them at $1.35. From the most recent MD&A; The Company’s Investment Committee approved the investment in Avante in July 2021. At December 31, 2021, the Company owned 2,000,000 common shares of Avante, representing a 9.4% equity ownership interest in the company. The

[hevin]

Apologies Delueze! Didn't have my readers on. Fax Capital took a loss then while it appears Fairfax wants to make a tidy profit. My guess-and hope- Fairfax will push to sell the Avante piece which is more stable than logixx although lower rev (approx 20 million/yr?) for another 20 million or so which would give us all just under 2.00/share....fingers crossed and lost in fantasy...

[nkbourbaki]

Fair argument, for sure.  My point was mostly that you have to be careful drawing conclusions from Fairfax's actions.  Their interests often differ from minority holders.  (Look up the Fibrek saga to see what I mean.) Maybe this is normal course, but I note that Fairfax's Support Agreement stipulates they will vote against any competing acquisition proposal.

[Froggy1]

Pretty good.