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Data Communications Management Corp T.DCM

Alternate Symbol(s):  DCMDF

DATA Communications Management Corp. is a Canadian tech-enabled provider of print and digital solutions that help simplify complex marketing communications and operations workflow. The Company is engaged in delivering individualized services to its clients that simplify their communications, including customized printing, highly personalized marketing communications, campaign management, digital signage and digital asset management. The Company’s solutions include DCM Digital, Print & Communications Management, Marketing and Technology & Innovation. Its DCM Digital solutions include customer communications management, digital asset management, personalized video, location-specific marketing, multichannel marketing workflow management, and digital signage. It serves brands in various vertical markets, including financial services, retail, emerging markets, healthcare and wellness, not-for-profit, energy, hospitality, lottery, government, and others.


TSX:DCM - Post by User

Comment by dsarkon Nov 07, 2016 10:03pm
114 Views
Post# 25435011

RE:Question on financing growth

RE:Question on financing growth
LongRoad wrote: Given DCM's debt and financial position, does anyone have any comments on how they could finance growth that would be beneficial to existing shareholders?


First off I'm a believer in that their Q3 (2nd worst quarter normally) was $1.9M EBITDA because of one time costs (name change, roll back) and loss of sales from the strike.  Maybe their EBITDA would have looked like $3.5M-4M if this was a clean quarter.  So maybe we are looking at $20M EBITDA plus $3.5M from cost savings as we roll into 2017, which is fine.  The only real costs once severance is done is current income taxes, interest (800K per qtr), and capex (450K per qtr).  The rest of the cash can go onto interest bearing debt, which is about $60M.  Very manageable if EBITDA stabilizes at $20M+.  I think they can use that free cash flow and a combo of fresh debt / share issuance (as long as the share price ($4+) is higher than book value) to handle any acquisition.  

The other thing is this is so cheap considering we are trading at 1.5-2X EBITDA that I wonder if predatory bids might come a looking.  Keep in mind DCM talks about consolidating a competitive market.  But what happens if a bigger fish in the same space that does $200M EBITDA wants to consolidate DCM and get their clientele base & existing businsss?
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