ZO: Value of NN stock. From YHOO boards.
messages.yahoo.com
ÿ 11/23/1999 9:03 pm ESTÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Msg: 12538 of 12554
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ
$ value of NN-part 1ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ
ÿby: fi99_2000ÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ
ÿAfter reading numerous posts it became apparent what is missing is a financial/analytical
approach to arrive at what NN is truly worth to an acquiring company.ÿ
The acquiring company is not buying NN for its brilliant sales force or their terrificÿ
ÿmarketing capabilities.ÿ
What they are buying is the following:
ÿ* 36170 - the industry leadng multiservice switch. Installed at 350 service providers
ÿÿÿÿ worldwide. The Yankee group predicts a 36%ÿ compound growth rate with a marketÿ
ÿÿÿÿ size ofÿ $7 billion in annual sales by 2003 for this type of switch.
ÿ* 350 IVSN - the industry first multiservices ATM based access mode thatÿ
ÿÿÿÿ supports voice and data services and also future IP-based
ÿÿÿÿÿ services through a mix of narrowband and broadband access solutions.
ÿ*LMDS - NN early pioneer and currently winning 50% of all contracts.ÿ
ÿÿÿ The Only company with fast TDMA capabilities.
ÿ* 3dSL - delivers integrated voice, broadcast video and internet accessÿ
ÿÿÿÿ services to customers over existing copper infrastructures.This
ÿÿÿ ground breaking technology costs only $20 more per port than the
ÿÿÿÿ simple ADSL product from ALCATEL.
ÿ* ATM based class 4 replacement switches running with SS7 software.
ÿ* carrier class IP edge routers from the NORTH CHURCH acquisition.
ÿ* IPsec security products from the TIME STEP acquisition.
ÿ* the best network managemnt capabilities in the market place.ÿ
ÿÿÿ Used exclusively by ATT to n manage their global GSMP network which
ÿÿÿ manages networks for some of the biggest companies in the world.ÿ
VALUE of NN-part 2ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Msg: 12539 of 12554ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ
ÿhttp://messages.yahoo.com/bbs?action=m&board=4687030&tid=nn&sid=4687030&mid=12539ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ
ÿ* soon to have a 50 gig switch and a 450 gig switch by mid 2000.
ÿConsider that Fore went for $5 billion without anywhere near the productÿ
ÿ offering of NN and only had a 40 gig switch. Therefore, you
ÿhave to start at $5 billion and adjust for all of the state-of-art productsÿ
outlined and the significantly larger installed base of teleco
ÿcustomers around the world. A premium of 40% is both reasonable and conservative.
The price becomes $7 billion. Now what about the
ÿTDM revenue? About $500 million annual revenue of high margin business.ÿ
The TDM business could be kept or sold for $1.5 billion
ÿmuch like the Stanford deal was structured. This raises the buyout price $8.5 billion.ÿ
At this point you have to consider the affiliates. When
ÿIRONBRIDGE goes public through an IPO and if it is half as successfulÿ
as Juniper was the 40% stake NN has can generate $2 billion. The
ÿtotal now is $10.5 billion. However NN also has about a dozen moreÿ
state of the art affiliates like Imagic, Pixstream, Fast Lane, Space
ÿbridge, Starvision, Telexis, Bridgewater, Ubiquity, etc.ÿ
No one can dispute the fact NN has realized significant gains in the past from the
ÿsale of affiliates such as BNI, ACC, Cambrian, and Vienna.ÿ
It would be reasonable to assign another $1 billion for the rest of the affiliates.
ÿÿÿÿÿÿ
VALUE of Nn-part 3ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Msg: 12542 of 12554
ÿ
messages.yahoo.com;
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ
ÿThe total fair buyout price is $11.5 billion. Divided by 184 million sharesÿ
ÿ is about $62.50ÿÿÿ per share. Since there is more than one interested buyerÿ
ÿÿ a 10% premium should be added and the per share price becomes $68.75.ÿ
ÿÿ NN hasÿÿ about $300 million in cash or about a $1.60 per share whichÿ
ÿÿ should also be added raising the price to $70.35 per share for the buyout.
ÿÿ Before the critics on this board start laughing consider the following:
ÿ* 5% of NN's shares were probably purchased already at the $17 range
ÿÿÿÿÿ (9.2 million shares)at a total cost of about $156 million.ÿ
ÿÿÿÿÿ The restÿ of the shares will cost about $12.3 billion, total cost $12.456 billion.
ÿÿÿÿÿÿ However, if the acquiring company sells parts of NN in the same
ÿÿÿÿÿÿ way as the Stanford acquisition the net cost is reduced as follows:
ÿÿÿÿÿÿ cash used to acquire Newbridge $12.456 billion
ÿless Newbridge's cash - .300
ÿless sale of TDM business -1.500ÿ
ÿless cash from Ironbridge IPO -2.000
ÿless cash sale of affiliates -1.000
ÿ-------
ÿNet Purchase Price $7.656 billion
ÿ-------
ÿDivided by 184 million shares the net is $41.60
ÿper share.
ÿThere isn't a U.S. networking company that comes close to the success NNÿ
has enjoyed in Europe and Asia so there wouldn't be an overlap
ÿin markets. It seems to me considering the products and successful market regions
ÿÿ it would be a match made in heaven for some U.S. networking company.
ÿÿÿ The motto remains hang tight and don't give up your shares for peanuts.ÿ
ÿÿÿÿ |
