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Technology Stocks : SYNTEL (SYNT) - Upcoming Year 2000 IPO -- Ignore unavailable to you. Want to Upgrade?

To: JDN who wrote (2601)	10/8/1999 11:30:00 AM
From: Steve Rodio	Read Replies (1) \| Respond to of 2761

JDN, I have not studied the numbers in depth, but we know that Meiter had $25 Million in revenues for the year ending June 1999. Synt paid $17.4 Million cash, plus the possibility of an additional $16 Million over the next two years in what they call "earn out" monies. This means that if the acquired company meets certain financial marks, the seller gets the addiditonal compensation (or part of it). Typical in purchase and sale transactions of this type (although this earn out is rather large, in my experience. Usually don't see earn outs at almost 50% of the purchase price). Then, in addition to the above, SYNT argeed to buy the 300,000 shares for $20/share two years from now. The cash cost to SYNT for this piece could be anywhere from $0 (if the shares are trading over $20 for that 90 day window to $6 Million (if the share price were in the pennies). Total cost for this acquisition will therefore vary markedly depending on financial performance and stock price. Could be anywhere from $17.4 Million to 39.4 Million. Pretty big unknown. Maybe that's why its trading down. I don't know. But I do like the company. Have been accumulating slowly