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This industry is really starting to heat up!

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pointofreturn   Sunday, 04/13/14 11:12:41 AM
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This industry is really starting to heat up! At least on the Canadian side of the border. Let me introduce you to Loyalist Group Limited (US: LGLTF, CAN: LOY).

Loyalist owns and operates private English as a Second Language (ESL) schools across Canada, with a focus on Vancouver and Toronto. They offer ESL for international students, training programs for teaching ESL (TESL), career training courses, and corporate English for professionals. The business plan is to become the premiere consolidator of independent, privately owned and operated schools, in what is considered to be a large and extremely fragmented market. Substantial revenue and cost synergies can be realized quickly, thus making acquisitions highly accretive to earnings. Loyalist is well financed, having successfully completed 2 financings, raising over $15 million the past few months, and has good institutional and high-net worth investor support (billionaire entrepreneur, Seymour Schulich, holds 13,000,000 shares). Loyalist is in a very good position to continue executing its growth strategy given its experienced management team, economies of scale gained over time, and the lack of any other competition in the marketplace.

Loyalist could exit 2013 with a revenue run rate of ~$32.4M, EBITDA of ~$6.6M, cash of ~5M and fully diluted shares of ~132M.

Loyalist could exit 2014 with a revenue run rate of ~$80M, EBITDA of ~$15M, and no need for further dilution.
THREE-MONTH PRICE TARGET: $1.00+/share

Upcoming Catalysts:
• Q4 2013 financials due out at the end of April
• Q1 2014 financials typically out the end of May
• Corporate update
o How the consolidation of new acquisitions is going
o An update on the new, high-margin student housing division
o Update on how the new franchising program is rolling out
• Introduction of the new Loyalty Program

Due Diligence:

Paradigm Analyst Report
http://loyalistgroup.com/images/PDF/Morning%20Comments%20-%202014%2001%2031.pdf

MGI Securities Analyst Report
http://loyalistgroup.com/images/PDF/Initiating-Coverage-LOY-08-15-2013.pdf

Jacob Securities Analyst Report
http://loyalistgroup.com/images/PDF/LOY-Loyalist-Group-Limited-MTI-Acquisition-July-9-2013-JSI.pdf

Cormark Securities Coverage (VIDEO)
http://www.youtube.com/watch?feature=player_embedded&v=XN6W3GOVCjA

Blog 1
http://seekingalpha.com/instablog/19040961-e-vestorsgroup/2447311-loyalist-group-limited-an-undervalued-profitable-small-cap-canadian-education-play

Blog 2
http://seekingalpha.com/instablog/19040961-e-vestorsgroup/2616661-update-loyalist-group-limited-is-diversifying-its-revenue-base
Blog 3
http://drsaraheaton.wordpress.com/2014/02/18/a-new-kind-of-loyalist-public-esl-education-takes-on-a-whole-new-twist-in-canada/

Blog 4
http://www.freenpv.com/?p=442

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