Darren,
It appears that ENCD will do $148M, or so, this year, while RGFX will do $57M, or so. If the companies are indeed complemetary, it makes very good sense for ENCD to buy RGFX. It has been said that ENCD has the marketing, and distribution channels, while RGFX has superior technology--and ENCD basically services the lower end of the market, while RGFX has the high end market. Sounds like a perfect match. ENCD buying RGFX would eliminate considerable dual marketing/sales/administration costs, and ENCD could bring a considerable improvement to their bottom line.. and as you also said, if ENCD offered .3 shares of ENCD for each share of RGFX, they would add 38% in additional revenues to the company, while only increasing their 11.4M shares by 3 million, or about 26%. More importantly, they could probably increase their earnings per share by much more.
Buzz |
