RE:RE:RE:RE:RE:RE:RE:RE:RE:Why paying off EMD Sorono ?JayjayUSA12007 wrote:
Why paying off Serono ?
1/ "as part of the amended agreement, EMD Serono will cancel all liens, hypothec and security interest over Theratechnologies’ assets."
Thera will be free of all liens on its assets, a pre-condition for any kind of merger or buyout.
2/ "As a result, this transaction is expected to be accretive to the company’s EBITDA by over US$4.5 million per year for the next four or five years,"
Furthermore, the value of the company in any kind of transactions is usually based on annual revenues, EPS or EBITDA. Since an early stage pharma rarely declares positive income, EPS would be out of the equation. So, only either revenues or EBITDA left.
Now, annual revenues sometimes does not reflect a company financial heath, especially from the buyer's perspective, EBITDA would be used in most of the case to calculate a company values.
I dont really get 1). Why do you hand over a chunk of the company to some new investors to end the serono deal when you could use cash on hand now if the merger/buyout was imminent or from some of the trogarzo revenue in the coming Q's if its further down the line. If you know you're selling the company this seems like a complex and pricey way to go about this small part of the process.