Avante Corp V.XX

Trading below Net Cash with no value ascribed remaining biz

[Stonksonlyup90]

Conservative calc of Net cash after transaction closes -

$23M - Cash from sale of Avante Logixx ($24M closing price less $750k fee)
$2.5M - Remaining Working Capital (MINIMUM - after accounting for W/C adjustments from sale)

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$25.5M net cash
26.5M - Shares O/S
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$0.96 cash per share 

Add in the value of the remaining business - doing TTM EBIDTA of $1.9M (which should be able to scale further given low operating leverage requirement and $25M of net cash to grow the business).

Even if you slap on a ridiculously low EBITDA multiple of say 4x, that adds another $0.29/share value.

Total would be $1.25/share - upside of 49% from the $0.84 it closed at yesterday!!

Absurd valuation if you ask me and creating a fantastic opportunity for investors... my only fear is that they'll be able to take this company private for anything less than the $1.75/share value that was implied by the $SECU offer!!

LONG. Glta

[Torontojay]

It should be clear to everyone that Avante shareholders would have been much better off with the takeover offer. I believe shareholders would have received the equivalent of around $1.71/share. Take a look at where the share price is now and it's a BIG disappointment.  Suppose the company is correctly valued in the $1-$1.25 range, it is still much lower than the offer price. I agree

[hevin]

Hey Toronto Jay I know the feeling as I've had the occasional fit of rage about this. That being said however I think Fairfax well knows that they can get more money either through Avante purchasing an accretive adjunct company or selling Avante for a good price which should get us in total more than 1.71 a share. Suspect Fairfax is very well hooked-up and is helping make deals as we speak

[Possibleidiot01]

If this was a U.S. company - three words - CLASS ACTION LAWSUIT.

[mlmack66]

OK sale has been approved and will be completed shortly. Management should give us a balance sheet and sales projection so we can put a proper valuation on the remaining business.

[Possibleidiot01]

I'm confused at how you can do that with only one of your two metrics supplied in the update. ", the Company will have zero debt and expects to have cash balances of $10 million, which is equivalent to approximately $0.38 per share." Positive ebitda predicted ; I'm just not smart enough

[mlmack]

I was looking for revenue projections also, looks like we might have to wait until the end of July.

[Torontojay]

  It's very tough to see this unfold when shareholders had an opportunity to get about $1.71 on the deal.