CF- can you help a brother out?
I'm new at this hard-core accounting stuff.
I think you are saying the Xyplex deal may have cost $16.4M in shareholder equity. Given 26.6M shares, that is about $0.62 per share, on 1998 estimates of $1.23 (ave. from Zacks.)
MRVC price when Xyplex was bought for $35million + 421,402 shares (warrants @$35) was about $28; about the same price today, which makes the math easy.
That is $35M + 421,402 * $28 =
$35M + $11,799,256 =$46.8M
If we use $35/share the 421,402 shares are worth $14,749,000 for a total of $47.7M.
Just to have it written down, Ratheon paid $170M and Whittaker paid $120M for Xyplex. And Xyplex sales declined from $120M -> $80M -> about (?) $45M
MRV's net revenues were $ 165.5 M in 1997. That makes Xyplex sales about 27% of MRV's for 1997, assuming Xyplex grows as MRV does, same margins, and there is no canibalization of sales... that is about...
$1.27 earnings per share * 0.27 = $0.33/share for contributions from Xyplex.
The cost in equity was $0.62/share...
So in a rough, crude, and not very optimistic (at all) scenario, the equity lost in shares is paid in 2 years. Less, because earnings for 1999 are estimated at $1.73 (!)
We hope that Noam can get a lot more than $45million from Xyplex. How much more?
I'm already out on a limb. I don't know. I also don't know what analysts are assuming when they figured the 1998 earnings.
Even using the $16,390,000 number from the 8-k/a, this seems to be a fairly good buy; it doesn't take much to make the deal look great.
What am I missing? At first the numbers looked a little intimidating to me, but it looks pretty reasonable, from the back of my envelope.
Richard |
