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Biotech / Medical : ACMI - Accumed Inc. -- Ignore unavailable to you. Want to Upgrade?

To: CARYTRE who wrote (1175)	1/17/1998 2:03:00 PM
From: Sigmund	Read Replies (1) \| Respond to of 1894

ACMI will be transfering certain assets to NewCo. Others will also inject certain assets including but not limited to cash. ACMI will have rights to a certain share of the profits of NewCo. ACMI will have other contractual relationships with NewCo including a long term manufacturing contract and perhaps a management contract. The market will assess the desirability of this deal based on both the structure of the deal and the synergy resulting from the deal. It seems to me that ACMI has invested plenty in the assets transferred into this partnership. It makes sense to ask what has been invested and how this relates to the current market cap of ACMI. The market cap of ACMI respresents what the market sees right now as the total value of ACMI. As shareholders, we want the market cap to increase not decrease. If ACMI has made a deal that is too sweet for the other partners, investors in ACMI will be turned off. If the deal is a good one for ACMI that is good news. The synergy or lack thereoff is a bonus/penalty on top of the structure question. I think all agree that the synergy part of this deal looks very good. I guess my deal structure question might translate back into an accounting issue. If R&D of any of the partners is expensed, then how was the value of the R&D spent on these products factored in when making the deal? If R&D is capitalized then if these products were transferred at book value perhaps I am ok with it. But if the products and technology of any of the partners are worth dramatically more or less than the R&D expended, there is still a problem with transferring at book value. Normally companies retain outside experts to assess the fair market value of assets being transferred into a partnership. Was this done? I also wonder why this deal was announced before it was finalized. Was there a leak? Was this the reason. My experience is that announcing a deal before it is finalized puts the company at a big disadvantage in negotiations because the company very much wants an announced deal to be completed. Personally I would have much prefered to hear about a done deal rather than a deal in process.