RE:RE:Why did Concordia make payment to Cinven????rad, How do you think the market will react if the exCEO is charged for his "offshore margin calls"
I think it will be the final toll
rad10 wrote: happyretirement wrote: If as TD states that AMCo underachieved during the earn-out period....
"The company's net debt to estimated earnings before interest, taxes, depreciation
and amortization for 2016 is about 6.4 times, and it faces other challenges such as
potential drug price reforms in the U.K. Concordia's $3.5-billion (U.S.) acquisition of
Amdipharm Mercury in 2015 had been expected to become a primary driver of
growth, but the business underwhelmed for the nine months ended September, 2016".
"An earn-out payment of up to US$220 million may be payable to the sellers of AMCo
in 2016 should the AMCo group of companies achieve certain levels of gross profit
over a period of 12 months from October 1, 2015. This payment will not be made
should the AMCo group not achieve these targets".
JMO
Private equity ate Mark Thompson for breakfast. He didnt realise when he did the AMCo deal that the improved balance sheet of the two companies merged through Cinven out of bancruptcy was purely due to gouging price hikes on second tier products and channel stuffing. The improved AMCo balance sheet was illusory and transient - the UK government has gotten wind of it................. The public outcry started late last year - too late to affect the earnout targets.
Former senior management realised their error and the very complex offshore margin calls are not coincidental....................