RE: Eacom sold! Very cool. I like it. Thanks for the share WW.
I know very little about Eacom save for Rick Doman is (was?) at the helm. He's not a guy I'd put my money on, but that is a heck of a premium at north of 40%.
I did some digging and found that Cannacord had a target price of 0.40 based on a 2013E EV/EBITDA of 4.5x. So, the stock was undervalued and this firm picked it up for a song. Why was it undervalued? Tough to say, but Mr. Doman might have rolled the dice too early on the super-cycle. He seems to be the riverboat gambler of forestry.
Anyway, this is the same as someone offering $5.00 a share for ANS.... but a 1.5 months ago. Lumber won't boom like OSB, but lumber won't bust like OSB will in 2015 or so. Six of one, half dozen of the other.
But... where there is smoke there is fire. And, so sorry for the lame analogies! I promise I am not a Uncle Reamus the coot, I'm barely 30. Regardless, the equity boys love cheap cash flows and they have this. Put them in the room together (unprecedented) and they will ensure that the crash is mitigated. It's a suicidal industry that pumps capacity onto a dead market (last man standing theory.) Some hitter in TO and NYC will hedge against this. So -- very good overall. If I was bidding as a equity outfit I'd pay a max of $7 per share for ANS. This is a DCF of 332M a year based on a cost of capital of 10% (huge guesstimate) and then halved based on my ability to buy NDB... AND... maneuver politically to restrict Chileian OSB to limit supply. But prices may jump to $550+ if (when?) the next hurricane hits. Then all bets are off and we are in the $9 range.
Thx again man, great find. Just crazy to see it sold for the price target. Woulda made it there eventually. But the sharks beget other sharks and easy cash flow is the blood in the water.
/DP