"The proposal, which provides the framework for further negotiations, describes a transaction with a purchase value in excess of
$100 million and a fully secured financial structure that will generate GIFS in excess of $1 million a month for the next ten years."
Sounds to me like $100 million+ is the total present value. At 20% cost of capital, reasonable for a growth company, the annuity of $1 million/month has a present value of $52 million. That would leave 'in excess of' $48 million that would have to be paid in cash, stock or other assets now. Depending on the designated cost of capital, these numbers could be quite different. Nothing keeping GIFS and friends from calling c.o.c. 1% or 50%.
As for shares outstanding, I think some of the acquisitions have been made with restricted stock. IMXS was, but the others aren't independently traded, so disclosure hasn't made it obvious. Since GIFS is really pushing book value as rationale for being undervalued, it undermines their arguments to spell out the share count expansion.
GIFS has a lot of assets, but it doesn't have huge piles of cash sitting around to make acquisitions. Of course this divestiture could change that for future acquistitions. |
