Hooper Holmes Inc. (fka HPHWQ)

[downthehatch]

Not sure why people are negative on this merger/ acquisition. Looks like HH is acquiring a company with an almost equal amount of revenue, since the PR says the combined companies had "$67 million in revenue in 2016" which means Provant had about $33 million to HH's $34 million.

They are issuing new shares at .80 (approx current price) to raise cash, and issuing about 10.5 million shares to Provant owners for the assets/revenue of Provant. So, they are paying about 8.4 million to double their revenue, from 34 million to 68 million. Evidently, the firms providing the financing see this as a good deal.

They gain scale, new financing, and the ability to cross-sell as they report NO overlapping customers.

Can't see how this is not a plus, and will accelerate HH reaching profitability. That is key, and this helps us get there more quickly. It does look like Provant is private, so we don't know whether they are profitable or not. But clearly doubling revenue and reducing overhead and fixed costs is a good thing.

I can't help but think that the uncertainty over the future of Obamacare/healthcare subisidies, etc., has contributed to a difficult operating environment for HH.
But I still think they are in a great niche, with an excellent future. There is still massive benefit to companies to increase the wellness of their employees-- both from a purely financial standpoint, as well as from the standpoint of more productive employees. And in this business, scale is a very good thing.