Just had a moment to Read the BARI just had a moment to read the business acquistion report.
Medexus has always been profitable and earnings are on a nice projectory 2016 Sales of 4.2M with NI of ~90K; 2017 Sales of 4.8M with NI of 250K; Now for 9 months of 2018 earning more than all of last year with Sales of 4.85M and earnings of 330K.
Medac had a little bit of an interesting history it seems they have been at a major loss for 2018 and 2017FYE (March FYE) of -14M and -18M respectively funded through shareholder notes.
Though it appears the last 6 months have turned profitable (last 6 months shows 14M in sales and 1M in NI with Gross margins materially improving over the last 6 month period as well as improving SG&A by over 2M$. From reading the actual financials, the company purchases all its product from its stockholder (product cost of sales was the main reason for the net losses in the past). The terms of this agreement will have been renogotiated to reflect fair market rates. I am presuming that this was simply being done from an accounting pespective for the main stakeholder and they were likely over charging for the cost of sales (which they then changed in the past 6 months to reflect what it should have been and what will be the case going forward).
I also expect just like any acquistion (and especially given the fact it is a merger of 3 entitites) that managment is assessing all redundancies and there will be susbtantial cost savings when operating as a combined entity (once we get rid of all the one time/non recurring acquistion costs in the next Q). This will only improve the margins and earnings of the new combined "Medexus Pharmaceutical".
We will see the results over the next year - I'm still bullish on the prospects (and I believe there is value at the current prices). I just think it will take longer than some had hoped to materialize into meaningful value for shareholders.