Quarterhill Inc T.QTRH

Thinking out loud - comments invited

[cabbieJBJ]

What if, in sequence:

1. A comprehensive settlement is reached with Apple  (this is key);
2. QTRH's stock price pops to $4.50; and
3. Management then buys out the rest of Wilan, including the name.  Fattoche, Skippen, Watchmaker and Vladescu are holding QTRH stock and options worth ~$15M and could be at the head of the line.  Other key management may be invited to join.

A $100M 5-year investment fund is used to buy out the rest of Wilan.  A fund established projecting 15% return plus capital return (estimated payout over 5 years is ~$141M) could be funded from projected Wilan normalized EBITDA (per QTRH latest investor presentation) of ~$30M/year.  The fund could be renewed or a new fund launched after 5 years.   

Key questions:

1. How secure is the ~$30M normalized EBITDA estimate;
2. What risk rate of return is acceptable.  My example uses 15%; and
3. Are there Canadian tax credits or carry forward losses to sweeten a deal?

Thoughts?