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TED- how does the L3+ISC bundle sell? How bout ACES!* ** *** ****
*price is a factor but NOT the factor. But if you don't have the full array of products, you cannot BUNDLE.
** product positioning( unique quality attributes) is a factor but NOT the factor.
*** service is a factor but NOT the factor.
**** con-ops is not A factor, assume TSA con-ops is followed. By the by, TSA con-ops is becoming A larger factor over time. Some countries are on NO-FLY lists thanks to very weak, off base, con-ops. Congress is considering TSA gear selection and training must be implemented to get off NO FLY LIST.
My sense, L3+ISC in OZ- no PR was a one off to slide under competitive radar and to allow both parties address bundling. The cream is this: L3 gets hands on B-220 and likes it.
TED-
Within a bundled bid process: ISC loses opportunity as they sell only ETD so they are locked out, L3 loses opportunity because they don't have fully cert'd ETD-- they sign a one-off for down under...no PR of arrangement is for secrecy/surprise.
Smith's had won a major deal in Saudi peninsula via a total bundle. It really is what clients want: lower prices, single call for service, cohesive screening con-ops.
But it is also great way for ISC to let L3 have a sense of what the B-220 can do.
Ted-
- NO PR is far more telling than ISC PR'ing it. There is a reason for NO PR.
- likely, L3 was bundling for a full service-full security spectrum type tender and didn't have THE key component to complete the submission--a fully cert'd ETD product.
- but consider this: OK, you ( L3) are our distributor, here is a B-220 to field test.
- we agree NOT to PR this arrangement per your(L3) request.
A prelude to further engagement? Certainly ISC has NOT been very forthcoming with information but TO NOT PR has more significance than a PR for just an OZ distribution arrangement. IMO.
Shi- they need to feed you the release PR and you deliver it on Ihub, then just drop the mic and close the deal up. LOL.
Seriously, the debut of the Hx is the turbo-event as it underscores the next gen. ETD leadership position for ISC. I am looking forward to hearing about it. A word or two about the inline would be appropriate.
Shi--you hit it on the head--its show and tell time. Why is ISC the category leader---
- TSA sales updates
- new WW wins
- and the NEW QS-Hx, the new standard in non-contact ETD setting the resolution bar 12 times higher than our next competitor in the category.
Now, we'll take your questions. However, we cannot answer nor will we consider any questions about our strategic explorations. note, plural. OK, first question comes from Ted Peele about a partner buying taking a position in our company. Thanks Ted. Next question comes from Buffalo about why we are having a conference call. Because we can. That about wraps it up.
TED- DARPA just previewed the Prophsey System today...blood analysis while you wait...they also showed a blood cleaning ( filtering)machine, while you wait. So plenty of disruption is already disrupting that analysis of human organics.
Meanwhile, we have an ETD lead, we have connections to buyers, those buyers are ready to buy-- we have to MOVE FAST. I can't yell that loud enough.
Ted- actually I think they realize that NOW is the max value point for ISC--everything points to that...sure, they could say: ISC controls the future of ETD therefore we are much more valuable down the road a bit...but pre-emption and disruption are the norm in screening over the buying cycle. It is obvious that Smith's is trying to corner the sector and has lined up all the needed IP to do that...but Smith's is working with UN-CERT'D technologies ( 1StDetect for ETD is un-cert'd) so ISC and EDS BUYER XYZ have a real lead to market...again, NOW is the time.
So, we get back to what is decent, fair market value of ISC to a major EDS maker?
And here is Percy's answer: ISC EV $550M.
TED- BMG sort of pointed to a buy-in more than a buy-out when he spoke about ISC having the ability/opportunity to spread the benefits of their inventions as far and as wide as possible. Smart statement.
That very statement drives the buy out price upwards.
What an L3 does not want is the "unknowns" another significant owner brings into the company's dealings. That control is worth the difference between buy in and buy out.
An "L3" like company can make the most of ISC IP in shortest amount of time...and they get ISC current sales opportunities all the while.
What does the future hold? ( you point to more value in the future)...maybe a lot more, maybe a small amount more...but today there is value to harvest by all parties: retail, the buyer, the company and the debt holder...so lets get on with it, IF it's at the predicted valuation, at least $500M or as Percy has pointed to: $550M!
CSTI- keeping the stagecoach BEHIND the horses!
Ted- partnership with DM riding along is NO-GO. ISC needs funding. But the larger point to "needing funding" is this: the companies that DON'T invest DIE young in this sector and even worse, companies that DO invest at the wrong time also die.
Look no further than ISC--years of struggling, borrowing, striving, competing and finally succeeding to a level that is as far as it can go on its own. Both S/M doubted ISC would make it thru CERTIFICATION which then slowed their investments in R/D which allowed ISC to vault past them.
You look at a Smith's and you might say: they were fully loaded with EDS and partially loaded with ETD before the Morpho T-O and 1StDetect tie up--but Smith's knows they didn't have the IP in-house to compete at the next iteration of DETECTION. This bodes very well for ISC. We should be able to sell for at least 5Xs what we have invested.
Hum says $250M EV. TR was an $80M EV and Shi was around $1B. Shareholder evaluations are usually OVER-VALUED estimates. But in this case, I think just the opposite is true. The sector is so unique yet competitive that if you can make good on your R/D dollar, then you have a lot more than OTHERS think you have.
I believe ISC has made good on their R/D dollar and they have the right people selling the future proposition of non-contact ETD to the right people at the very right time.
So lets start the upcoming CC with an intro of the QS-Hx...nothing says BLING louder than a poke at the leading edge of ETD than a dual mode, non-contact, hand held , self calibrating, continuously ionizing wonder unit with a suggested con-ops. Its time to meet the future of ETD.
Shi- yeah, why PR an L3 distributor deal for OZ!!! That's typical boolah boolah message board hype...besides ISC is successful on their very own, they don't need NO stinking L3-ISC joint marketing deal PRs!!! That's absurd, dumbest thing on this board of dumb things. I mean why do that? That's a universal joke of an idea.
BE PRAGMATIC SHI!
OR
THE RETURN OF THE CLAM?
Ah nope- we went thru this about a million times. TSA changed who was staying and when they were leaving ASCTL. But that is just like you to say DJ-BMG and GB were all lying to us in that special conf. call to discuss the cargo opportunity, which GB corrected about 6 months later after TSA update. But I digress...Dr. Jones is the #1 ETD salesman in the world. And you tried to throw him under the bus...tsk tsk for you Nowak.
Ah Nowak, you who doubted Dr. Jones sales talent and you who blamed the SP decay of 2015 on Glenn...and you who doubted that anyone would be interested in buying ISC and you who are now involved in THE discussion of that exact event.
Go read all of my posts. Each and every one. They have all pointed to a take out by a big EDS maker. Buffalo thought it was time in early 2015...I said: NOT YET, ISC has development work to do.
Then ISC began exploring strategic alt.s later in 2015...and Smith's ( who has ETD approved by TSA) ties up with ETD maker 1St Detect. I have explained why many times. Not sure what YOU have read, but what you have learned is nothing.
Believe. Don't believe. I could care less what you believe or say.
TED- The OZ event was likely done much in advance and because we now find out about we believe it tells more than it was intended for than when it was originally created.
We see it last week and think: Deal going down, there is the proof. Actually, they likely agreed to it long ago.
BUT and this is key, THEY SPOKE, THEY AGREED, THEY SHOW AT THE SAME STAND IN OZ. Not Rapiscan, not Smiths-- but L3 and ISC. That has some level of meaning...
Shi- that is NOT the whole picture...ISC is doing GREAT selling on their own ( 66-75% WW market share for swab based ETD) ...BUT...they are locked out of a few sales opportunities and likely to be locked out of more in the future.
This very reason is why Smith's acquired Morpho AND partnered w/ 1StDetect for ETD support---Smiths does not to ever be locked out of sales opportunity. And especially PACKAGED sales. This is the future, the all in one, one source for all your screening needs type of selling. And this is exactly why L3 would need a REAL, WW CERT'd ETD product with a lead in to the next gen. in ETD- non-contact.
So I am with you on this as it makes sense...and I would be surprised that L3 writes an 800M$ check but not amazed...
Before Shi's post: ISC IP worth $50M to a max of $125M
After Shi's post: ISC IP worth $1B????????????????????
Shi- you realize what you are implying...? In a way, you are saying your $7.50 to $10 take out has a real possibility...
Truth-- you posted one key point that drives our existence; ISC owns future tech./IP that can greatly benefit the world. BMG has stated such using different wording.
While the world has ignored other amazing inventions at earlier times, that won't happen today as we are all connected everyday. This foretells that SOMEONE will own this great invention and profit greatly while helping the world.
If you believe what I just wrote, then you are a buyer. If not, then act accordingly.
Shi- you are saying this is consummated and the OZ event is just a loose end that might have existed before the marriage?
Joe- this CAN make sense for ISC, IF-- that arrangement is predicated on a "next step" event OR if ISC is getting an opportunity to sell to some entity that ISC would NOT have gotten otherwise. This is where Doc Jones really is beneficial as he knows where he would be unable to pitch BUT thanks to L3's weight, ISC is in the sales presentation. Huge positive to sales as TOTAL PACKAGE sales is where non-english speaking countries feel more comfortable dealing with one company as opposed to multi-phone calls.
While THIS cooperative venture was NOT one of the strategic alternatives, it might have flowed out of that discussion...but the problem would then re-appear: what do we do with an 80M$ creditor that could own some 56% of the company?
Truth- truth is, L3 is at a show with ISC in tow. Nothing more or less at this point. However, THIS HAS NOT HAPPENED BEFORE.
L3 AND ISC SHARE AN EXHIBITOR STAND IN OZ.
MEH?
OR
A PROPOSAL TO FOLLOW...?
L3 could be:
1. exclusive reseller...why do that? ( some might ask)...reason: L3 can package their product line and capture a total needs type of sale; EDS flavors and a TSA cert'd ETD thanks to ISC.
2. to date, Smith's has done this very successfully in certain countries. So L3 may have found a way to do the same via an exclusive reseller agreement with ISC
3. doesn't that take $$ from ISC as they could have potentially pitched that sale alongside L3? Sure, if the deal is written that way...I doubt it is. It actually may be written that L3 pitchs the total dollar value and presents ISC's products with L3 guaranteeing them...
Long term benefit: L3 and ISC are dating...looking over each other's methods-products-people in an co-operative sales pitch which allows L3 to also ingest key info regarding ISC's product(s).
SP outcome: the market will sense rather quickly what is afoot-- if the dating is successful a proposal is in the works. We should know soon as ISC would be giant buffoons NOT to PR the heck out of an exclusive seller/reseller arrangement.
IMPLT- the facts are clear: ISC's Contact ETD is much preferred to L3's. Further, until L3 has gov. certifications it cannot even bid on those Gov.'s ETD contracts.
If NOT a sale, a selling co-venture of sorts is the next best thing. The show next week in OZ is a great place to intro that venture or complete sale of ISC and L3.
Even more prescient is recognition of future product marriages; EDS with a non-contact ETD attached or embedded or along side. To my knowledge, NO other company has the built in capabilities for NON-CONTACT ETD that ISC has. THAT fact makes it a GEM in somebody's crown, IMO.
L3 does have an ETD product. It has few gov. approvals and fewer sales. If you cannot get your ETD cert'd by TSA, you miss some 42% of the world wide market. ISC has proved how vital TSA approval is. Thus the interest by L3 in ISC.
Now the OZ event could be the intro of a co-marketing venture as in L3 can sell ISC ETDs in its pkg. sales. But THAT would be just an entre to an eventual "marriage".
However, NOW is GO time for an INLINE, non-contact, ETD product. NO ONE does or has more IP around NON-CONTACT than ISC thus we all perceive that a major play by L3 for ISC is upon us. Thankfully.
Z/TED-- L3 offers DM XXXM for their fully converted position. Something along that nature could happen. Instantly the SP resets at that valuation. Plenty of ways out of this but what has to happen: DM exits, L3 enters or owns outright.
ISC needs working capital to evolve their product line. L3 needs non-contact ETD for theirs. The current swab ETD biz is a nice add-on.
My prediction, by end of summer US public is screaming over DOGS SNIFFING them. Most visitors to a household with a nosy dog accept the intrusion, the US public won't. But until a non-contact spec. is ready to cert. products, nosey Fido will be with you at the airport.
Z- DMRJ has not converted. They are owed a ton of money. They want that money. Give them the money and take their position or close to that position. Its not like this is a unique situation.
One thing you can be sure of, DM has ruined the stock while building a huge debt pile that has to be plowed under/aside one way or another.
XYZ pays DMRJ out of ISC. Simple. Nobody wants anything to do with DMRJ but the fact is, they floated the boat. Now, they are sinking the boat. GET DMRJ out of the boat. Read what I wrote.
Pat- a partnership WITHOUT DMRJ would be fantastic but they also need an operating cushion. IE- XYZ pays 100M for 80M shares, pays out DM, SP leaps immediately past the value XYZ paid and the company uplists...sales increase, SP increases....in 12 months XYZ buys balance of company on certain objectives achieved. This aligns more with MCG's stated vision that ISC can sell more INLINEs to more gov.s or clients as a stand alone.
Flip side of this, hard to imagine a competitor wanting an ISC INLINE knowing that THEIR competitor is an owner of ISC...but if required, they will do that.
In this scenario ( buy in at a higher valuation that today), the SP will magically rise going into that announcement).
NF- DHS Director Johnson spoke about need for more canine teams and an urgent need to increase pre-check enrollments...those lanes are empty, every other lane is choked full.
Not having the Hx ready to be cert'd is going to miss a huge opportunity as DHS is making Congress for more dollars right away as the summer travel season starts in 2 weeks...
PTP--geez, I am guessing that L3 would NOT like uncertainty of owning a position where DMRJ is the de facto owner/debt holder. Too many uncertainties to that joint ownership...BUT...it would be nice to have L3 pay DM out of the stock and take a majority position...in that respect, the SP would fly high...then again, having total control and exclusive ownership of future products is where the deep value is for L3.
My new guess for T-O is over $600M/190M shares. The reasons are many.
SP ups and downs are now driven by the pro-flippers who show and go. That happens when a SP pop shows up on daily reports. Such is life...get ready for next week as there MUST be a reveal at that time. IMO.
Calling Percy, need your unique perspective on ISC potential to sell 3Xs more INLINE systems operating outside of L3's control vs. what an exclusive is worth to L3's current and future product lines...do you have a point of view on that prospect?
Z- exactly-- CSTI may be stubborn but they are not stupid, their master will understand. They are trying to cap a young volcano...who walks onto a train track and looks 180 degrees from the oncoming train?
Vintage--where have you been? DM owns some 56% and the buyer knows their B-O rubicon and mgt. option rubicon range and HOYR. at $1.8X a share.
We also know Bolduc The Great valued it at $500M at 115M fully diluted. These are lines on the table that must be crossed or the train goes off the track.
Valuing the company on current business and you get a dismal TR like EV.
Trying to value the company on forward look/potential is where it is at and we thank Smith's-1St Detect for upping the forward look EV greatly this past two weeks.
TR- EV80M/190M sh= .42$ ( pretty dismal prediction, in the rear view it looks like a drunk guess)
DM convert line, min, $1.20/sh=$228M-EV
MGT. option line, min, $1.50/sh= EV$285
Bolduc EV $500M/190M sh= $2.63/sh
Percy EV$550M/190Msh= $2.89/sh
Now, if you have leverage, let me know what that is...because these LINES form the framework for the deal. On one hand, DM is NOT going to roll over and will continue to back ISC, on the other hand, timing for all the leverage ISC has is right now, not next week. NOW.
I think the deal is done, today points toward confirmation,the share price should rise to about 30-80% BELOW B-O price per share. One telling aspect has been L3's stock rise...not sure what the fundamentals are that change that but adding more revenue for a piddling amount of shares paid to ISC owners is pretty smart business.
Would I like to see $9.50/share? Sure. Do I have a way to REQUIRE THAT...?
Yessirrr Shi! YOU picked a weiner/winner!!!!!!
And this moment in time is as perfect as it gets. We have what the EDS side needs to advance their sales today and create the products of tomorrow. That's worth something far North of TR's shabby EV guess.
What has been sort of unexpected is this: DM is backing BMG's play. So there is no "sword" put to BMG.
The market-scape is pushing BMG's play. And there is NOBODY more informed to speak to the world wide opportunities in ETD, at hand today, than Doc Jones.
I think even GB would agree--beat that $500M EV estimate and enter the TRACE DETECTION HALL OF FAME.
B-E_ higher=gooder!
A week full of positive PRs would be a good sign...I imagine they have a "backlog" of news to release.
I think there are plenty of ready uses and eager users for the "Hx". I think even TR will flip his polarity when that lill number comes dancing into the fray. In about a NY second, the world will realize that the "x" engine is going to be part of the T.O.T. Lest there be doubt, the T.O.T. is the WALK THRU PORTAL, not a walk in portal, just stroll on thru, the WTP does the rest.
I am stoked as a dream of loyal longs is about crystallize right before our very eyes! This should be a fun week!
When the ink is dry:
- QS-Hx intro'd and immediately generates sales, earlier that posted ship date.
( remember, ready for shipping by ISC's Q4 ending 6/30)
- Plenty of B-220s sold also, those PRs a-comin
- possibly a PR about INLINE CRADA
All of these product permutations underscore the significant and unique IP that ISC possesses and that competitors lack. This "glaring" strength will lead the way upto the take out PR, ideal drop time Tuesday May 11th.
Expect these descriptors in the L3 PR: immediately accretive, unique product portfolio that leads the world in contact ETD and is positioned for the future of ETD via it's strong IP collection of non-contact patents and products, the latest of which is the QS-Hx, the first multi-mode handheld non-contact ETD in the world.
Here's why the buy out price is going to be higher than we are imagining: the utter secrecy with which ISC has conducted the process is first-class stealth and something that an acquirer greatly respects.
When CSTI is gone, then we know it's on.
I like 550_plus debt_plus_cic payout, plus a scoop of rainer cherries/ 190 sh.= 2.89
I told myself, Buzz, hold your horses, don't get to far to the front of the surfboard, be pilgrim-esque in evaluations, don't buy the hype, stay calm, drink MORE Rye whiskey...the horse is out of the stall.
Percy- OK, lets say it is a buy in, my guess is say 30% of the company but any smart partnership has to get DM out of the picture(IMO), so the payout to DM would be for 30% of the company, yet fully diluted they own some 54%...how do you swing that and keep DM satisfied. I think we all agree, DM is the troll--er "fine partner" who must be made happy...
Sure they could offer $2.50 a share for 50M shares and pfft, DM is paid out, IF DM accepts...so I think the thing gets sticky-stinky if its a partnership.
L3 could easily slice off a lot of shares and make everyone real mighty nice and happy...and get the whole company, including the fine cadre of talent that has been selected to perform at a maximally exceptional level.
MCG spoke of selling the INLINE to the most buyers possible, translation: partnership - not a buy in. A good negotiation tactic, if it actually was said to push for a buy out.
If I was L3 and I liked the demo I would quickly calculate the effect on my business of a wild card ISC selling the same thing to me as everyone else and then pony up the $550M in L3 stock. I do like your aspirational goal, which by the way tracks the old CEO's strategic intent of an uplist into a $500M take out.
Great having your insight on this board!!!!!!!
Marv- they told everyone listening to the CC. Bolt-ons du jour!
KI- you are my new financial advisor. It IS a peculiar situation. But it should surprise no one. As long as it goes out above $1.80-ish, everyone will be happy.
Now you can guess the whose logo goes on the side of the T.O.T. " you have been weighed-measured-scanned and absorbed by L3- PASS FRIEND!"
Z- smart acquisition strategy/tactics require that the train doesn't run over the Take Out...and since its an OTC stock, anything can happen.
It will move up just around the PR release time. The 900K last Friday ( I was in that herd) were the " friends of the acquisition group" ( guess). We trade 120-230-90 and then 900-- that's a tell. But it should surprise no one.
For me, I hope its stock for stock. I like L3 good'n'plenty!
Married in OZ! They will announce the arrangement there. No better way to kick up the buzz at a show than to announce a marriage or a new living arrangement going into the show or there. ( ISC is the kid living in the L3 basement if its NOT a full on acquisition.)
Da Don is NOT going to be happy about them eloping off to OZ but he'll get over it.
TR--what are you thinking about the melding of their technologies...?
Percy--you sly devil!!!
FYI- nowhere did I say ETD would BE the only TOT modality.
Of course CT is a key TOT modality-- no argument there and the big reason for Smith's IP acquisition. Without CT the TOT would be a BOOTH!!!!!!!!!!!!!!!!
But you are dead wrong re: ISC ETD Portal...and you are wrong about Smith's -GE implementation of their ETD portals. Read the report by the oversight inspector. That report faulted TSA for "placing the ETD portals into use without adequate OTE". TSA said: national security drove our decision.
Look, we totally disagree on ISC's value and of course I think I'm right and will continue to believe until proven otherwise. Good Luck!
Maybe DM will provide an opinion as to EV for ISC- LOL!
Percy-- right on!!!!! I like your $550M goal line!!!!! It trumps my $435M layup.
We have to thank Smith's for playing their hand in broad daylight--that should about wrap things up.
I am guessing May 9th is BOLT ON day as ISC gets a place to push the envelop at a faster rate. And if it's L-3 stock for ISC- Major Bravo!!!!