Avecho Biotechnology Ltd V.AVE

Terms

[Skyscraper31]

The Aveda buy out is a bit confusing, and there is still risk left on the table beyond $0.90/share. The earn out piece is based on EBITDA achievements looking out to summer 2019 payable to shareholders on record at date of closing June 2018. In other words, we can sell now at market for ~$0.90/share, take our money and run, or wait around if we feel management can achieve 18 million EBITDA in this time period for an additional $0.45/share. And of course we have the option of converting our shares to the new parent corp. They earned 15.9 million EBITDA for fiscal 2017 coming out of one of the worst years in the sectors history. So to achieve an 18 million milestone by 2019 seems more than reasonable. To wait, or not to wait - that is the question. https://globenewswire.com/news-release/2018/04/16/1472128/0/en/Aveda-Transportation-and-Energy-Services-to-Merge-with-Daseke-Inc.html Earnout Under the terms of the Earnout, subject to certain conditions contained in the Arrangement Agreement, shareholders of Aveda of record as of the effective date of the Transaction (excluding dissenting shareholders) will be entitled to receive a pro rata share of the amount (if any) by which Avedas EBITDA for the specified period (being June 1, 2018 to May 31, 2019 (or if the parties to the Arrangement Agreement mutually agree, July 1, 2018 to June 30, 2019)) exceeds $18.0 million. Subject to certain adjustments, the total amount payable is to be calculated by multiplying 2.74737 by the difference of Avedas EBITDA during the specified period and $18.0 million, subject to a maximum payment of $0.45 per share and certain adjustments. Any such amount would be payable in cash approximately 14 months from the close of the Transaction.