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Concordia Healthcare Corp. T.CXR.R



TSX:CXR.R - Post by User

Post by Hockeyzon Sep 05, 2016 3:57pm
346 Views
Post# 25208290

Takeover/Way Undervalued

Takeover/Way UndervaluedCXR looks incredibly cheap.  There are many drug companies/investment firms with billions in cash (making no return) that are looking for ways to fill their drug pipelines where CRX is a steal.  CRX is selling at $8US (all in $US) and could easily fetch double that ($16 or $800M).  The future EBITDA seems to be about $520M/year or $10/share (52 M shares o/s).  Also, there is $3.4 billion in total debt.  Therefore, they could pay $800m + $3.4 billion (to pay off all the debt) = $4.2 billion.  In return they would get $520M + $290M (interest savings on the $3.4 billion debt at 8.5% interest) = $810M in EBITDA/year or a 19.3% yearly EBITDA return on their $4.2 billion investment.  They would also substantially increase their drug pipeline and would also have a further 60 new drug product launches in the next 2-3 years.  They also may be able to market the drugs much better than CRX. This seems like a sweet deal to me.
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