Some thoughts on this deal.I think as investors we have to keep a few things in mind here, that may not be that obvious to those that haven't been involved with RC as an investment for a long time.
RC is an ongoing company that has revenue and a very healthy growth rate. Sales of the check verification products has been extremely succesfull, but earnings have been dragged down by huge investments in to R&D.
What the Xign spin off gives you is several things.
1)First off all, out of an investor point of view it puts a value on that research.
Yes they invested a lot of money into research over the last few years, but now they have an equity stake of about 14.25 Million US in this venture that has other investors, the likes of Charlie. :)
2)They have established a much more "American" presence, something that I think will also prove to be extremely important.
Their contacts in the financial industry have always been great, but this will place them much closer to where the action is.
3)With that portion of the business spun off into a seperate subsidiary the drag on earnings caused by R&D Spending will be "localized" and a much clearer picture of the succes that has been had by the other parts of RDM will emerge.
For the record, do the math, and you will see that this deal means that Charly thinks the "R&D portion of RDM" at a buck and a bit US (1.50 Canadian or so) is a good enough deal for him to sink 3 Million US into it.
Hey, I paid a lot less for my shares of RDM as a whole.....
Marcel :)