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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange)
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To: Nero who wrote (2350)4/9/1998 5:13:00 PM
From: david james  Read Replies (1) of 2841
 
I think that what I find quite odd is that if they sold off MM Industra, they could probably get more than what is currently the entire market cap of MM Industra.

From talking to both Halef and a couple analysts, MM Industra is expected to have revenues on the order of $60 to $70 mill this year with after-tax earnings in the range of at least $10 mill. In 1999, the revenues should be closer to $100 mill and earnings greater than $15 mill. So giving them a P/E of 20 on those earnings, (a reasonable IPO valuation), that would give MM Industra a market cap of $200 mill.

That compares to Eco's current market in its entirety - of just around $175 mill.

Chempower was purchased for about $55 mill. It had a book value of $20 mill.

SRS I think with their setups in Saudi, France and Venezuela, and contracts in the range of $30 mill, could be sold for $30 mill.

Industra Services - not sure here, but have announced contracts in the range of $30 mill at least (this needs to be checked). Would be worth seeing what their market cap was before purchased by Eco.

There are about 5 other subs. Lake Charles I think has at least $10 mill in contracts.

So I see a break up value of at least $300 mill - and probably closer to $350 mill.

I can understand why someone might be interested in making a hostile acquisition, given that you could probably double your money in Eco pretty easily.

David
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