I gave my valuation of Ultralife's JV in Taiwan (UTI) in a recent post. Now that there has been a private placement, the
valuations have changed a bit. These numbers in my opinion are quite conservative, and are somewhat of an indication
of what our portion of the investment might be worth in the event of taking UTI public, or if it were to be sold outright.
This is a guideline as to what to expect if and when this were to happen. The numbers appear to be large and somewhat
unbelievable, but this is strictly due to the fact that ULBI still has a very small amount of stock outstanding.
Little, if any, analysis has been presented regarding UTI, a 41% owned JV of Ultralife Batteries.
Using conservative assumptions, the value of ULBI's investment in Ultralife Taiwan is as follows:
The valuations are based upon the completion of the second battery factory in 2002. Ground was broken on the second
factory in April 2001. The two factories will have a total manufacturing capacity of 56,400,000 batteries per year. It will
be the newest, most modern, fully automated battery factory in the world.
Based on full production, at a multiple of sales (1.5x), ULBI's (41%) share will have a value of $578,215,620, or $47.05
per share. Based on a conservative PE of 22, the value is $848,049,576, or $69.00 per share.
This is hidden value, it is not reflected in the present price of ULBI's stock.
Additionally, ULBI North America, and ULBI Europe are expected to reach cash flow break even by the December 2001
calendar quarter and to turn profitable by the June 2002 calendar quarter. |
