Hi, Pluvia.
Did anyone a calculus how many shares RRRR is going to issue for the $75M investment my Apollo?
If A. puts up $75M in order to receive a 25% stake, plus gets warrants to up the stake by additional 15% for another $75M, then based on the current outstanding shares (assuming full dilution, as stated in the news release), how does that translate into shares.
First the current share count:
"As of March 29, 1999, 31,462,828 shares of common stock were outstanding."
Then, after March they filed an S-3 to register 2.5M more shares, for a convertible deal from Februars.
Then, there are 3.21M options exercisable as of Dec 31.
Then, there are some smaller deals, for which additional shares are to be issued, in total roughly 2.2M shares.
That gives roughly 39.37M shares now outstanding.
25% of the then outstanding shares would translate into 13.12 M new shares (39.37 are 75%) - shares then outstanding: 52.5 M
The warrant to obtain more 15% of the then in total outstanding shares would again translate into 13.12M more shares. Why? Take 39.37 M shares as of now as a base of "60%". Hence 40% would be 26.25 M shares. The total number of shares then out would be 65.62 M.
So, Apollo invests $75 M for shares priced at $5.72 and warrants to obtain shares at $5.72.
For the "Hype!" factor in the RRRR story, I would also do such deals, given the cheap shares I am able to obtain.
IS.
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On February 26, 1999, the Company signed a definitive agreement to acquire 100% of the outstanding stock of FS3 Interactive, Inc. FS3 creates Internet-based business solutions, including Web marketing, design, programming, and E-commerce enabling. As consideration for the purchase, the Company will issue common stock valued at two times FS3's annual revenue, which is currently estimated at $1.7 million. The number of shares to be issued will be determined based on the lesser of $4.50 or the average closing bid price for the ten days prior to closing.
On March 9, 1999, the Company signed a definitive agreement to acquire 100% of the outstanding stock of Big Hand, Inc. and its subsidiary, Circumstance Design, Inc. Big Hand creates Internet-based solutions, including Web marketing, design, programming, and E-commerce enabling. As consideration for the purchase the Company will issue common stock valued at two times the trailing twelve month consolidated revenue of Big Hand and Circumstance, which is currently estimated at $3.0 million. The number of shares to be issued will be determined based on the lesser of $4.50 or the average closing bid price for the ten days prior to closing.
On March 19, 1999, the Company signed a definitive agreement to acquire 100% of the outstanding stock of Hype! Inc., a Canadian corporation. Hype! is an Internet marketing and communications company. As consideration for the purchase, Rare Medium Group, Inc. will issue 270,729 shares of common stock.
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Thursday April 15, 3:26 pm Eastern Time
Company Press Release
SOURCE: Apollo Management, L.P.
Apollo Management, L.P. in Agreement to Invest $75 Million
Into Leading Internet Solutions Provider, Rare Medium Group Inc.
- Investment to Transform Rare Medium Into New York-Based Provider of Venture Capital, Internet Solutions and Professional Services -
NEW YORK, April 15 /PRNewswire/ -- Apollo Management, L.P. and Rare Medium Group Inc. (Nasdaq: RRRR - news),
raremedium.com, today announced that they have signed a letter of intent under which Apollo affiliates will invest $75 million of equity into Rare Medium in a transaction that will transform the company into a one-stop provider of venture capital, Internet solutions and professional services.
This is among the largest single private equity investments ever made in an Internet company by one investor. Following the closing, Apollo will be Rare Medium's largest single shareholder with an ownership stake of approximately 25% on a fully diluted basis. As part of the transaction, Apollo is expected to have the ability to increase its position to approximately 40% through the exercise of warrants that have the potential to bring an additional $75 million of capital into the company. |
