ALL:
Okay here it goes (warning-it's long :-)):
Their office was in a very nice, upscale building. Tysons Corner is a well to do area. The mall next to the building has a Neiman Marcus :-) The office had about 4 office rooms in it, plus a waiting area, and 2 work areas. I got there at 4:45 est, and left at 5:30pm. There were 7 people working there during that entire time. Some of those people were from ACS. As you can see the two company's, soon to be one, are already working together. Tom says they usually work till 8 or 9pm. They were doing check payments while I was there, other people were working on some kind of computer system. The company looked like the real deal to me. Tom said that the office was getting to be to SMALL. They have been getting more and more business, and they think they need to move. In fact, Tom said I just missed their attorney, apparently they just signed a good sized deal, and will need to HIRE more people. This will of course further cramp the office. A problem they and I like.
As I said before the merger is pretty much done. They just need to polish off the paperwork. Tom said it should be done in two days. I imagine news will be released next week. Included in that release will be some numbers on revenue projections, etc. Tom said that the shares exchanged in the merger are all RESTRICTED. He said, he thinks that the shareholders will be happy with it. IMO, the merger news will provide a good boost for the stock short term.
He said they should be filing with SEC for the first time in 30-45 days. My feeling is (and I told him this) between the initial run-up on the merger news, and the filing with the SEC, I would imagine the stock will dip again. That's why I felt it would not be good in the medium term.
A note on the merger. When Tom first starting talking to ACS about merging, back in 11/97, they were start up with no contracts. As talks have continued, they have had a number of contracts. So what first started as a merger with a start-up with lot's of potential, has become a merger with a profitable company. This is one of the reasons the merger has taken this long. Obviously, ACS, wanted a little more from INFE, once they became a profitable company. Also, INFE's wide moving stock price had a hand in slowing things up.
The future or Long Term prospects. Tom showed me numerous company's that do staff leasing like they do. He pointed out 4 or 5 from the NYSE and NASDAQ, they were all in the $20-$30/share range. He gave me a packet of info on one of them: Vincam Group (NASDAQ-VCAM). One good thing about INFE is that they have a special niche in the industry. They do staff leasing for Government contractors. No one does this now. He said there are at least another 200 contractor's to do this for. He says they are all big money contracts. After the merger is behind them, Tom plans to market INFE more aggressively, to get even more business, and go after these company's.
One thing Tom mentioned twice, and that I think may be a real good reason to hold long, or BTS, is that INFE will probably be a great ACQUISITION TARGET. He mentioned how ADP and some other company's like ADP, have recently been buying staff leasing company's. I think this is better than counting on the mm's and natural buying to move this stock above the $1 level, and sustain it, IMO. I think the first earnings report, and the subsequent ones if they show improvement, will keep the stock at higher levels than .20 in the long term, but, I don't trust the BB market, to maintain much higher prices (like in the $1 range, IMO). However, if they are bought out, I think we could see much higher prices, IMO.
Well that's all I can remember. If I remember something else I will post it. If you guys have any questions feel free to ask. Anywhere I said "I think" or "IMO", those were just my take on things, others may feel differently. Also, as always, don't buy anything on my opinion, do your own DD.
Had to do the disclaimer :-)
Talk to you all later,
Rob. |
