Joe,
My understanding would be that Astella is "buying" OCATA, lock, stock and barrel. Meaning, per my understanding (and I'm an amateur stock guy who's read some books, avidly follows markets, invested for a fair number of years, Blue chips to getting my clock cleaned on having penny plays go BK in a blink and everything in between over the years, etc) - is when they (Astella) buy the company OCATA, they buy it all. Meaning EVERYTHING on the balance sheet of the company being acquired has to be settled either prior or post the purchase would be my opinion.
How that gets done- that's for the accountants and M&A attorneys and the two companies to work it out. But if OCATA has debts, then the buyer either inherits them and owes them, or perhaps the debt(s) has acceleration clauses that cause them to be due and payable in full upon sale of the company etc. So who knows- OCATA may have to use cash to settle certain debts upon sale, I don't know? Similarly, the buyer obviously gets any assets on the balance sheet like cash and plant and equipment, etc
So how and when they work out all the balance sheet obligations, I don't exactly know, as a lot of it I'm sure is buried in the fine details. But one way or another- every credit and every debit has to transfer and become the responsibility of the new owner, else be settled just prior to closing IMO- sorta like a house being in escrow.
When you sell a property, typically right in the final moments before the close, it's escrows responsibility to reconcile all accounts- meaning pay off to the old lender if there is one, any buyer credits to them, any cash settled, etc. All right up to within literally hours of the close typically.
I'd assume a business sale of this magnitude has a similar process analogous to an "escrow" where the tax accountants and M&A attorneys and all the rest of it "settle" everything before a final "close" and then it all wraps up, and the day after, OCATA is no more and everything remaining now is the new branch, division of "Astella, Inc".
I've been in companies where they were bought out (public traded) - and the employees see pretty much business as usual for a while, then usually a "get to know you period" by the new owners takes place (months for some buyers, maybe 1 yr for others), then they typically install some of their own mgt perhaps. And then depending on why they bought the company- one might see some serious heads roll as in layoffs, dumping certain managers or key staff they feel are not "keepers", sell off some assets, etc.
One place I worked, they had a huge manufacturing plant- like a city block in some of the most prime and expensive real estate in this nation. Right after the purchase closed, a bunch of the property surrounding the plant- instantly went up for sale. It had been grass recreation areas, big parking lots, etc. So the buyer obviously had done mega due diligence when they bought- and knew that the real estate was better than gold. They instantly had a real estate development team lined up. Within probably 1.5 yrs, all that real estate was sold and fully developed. A strip dining/mixed use shopping center went in, a medical building was built from the ground up, and a building that got converted into a sort of mega-church facility.
I always guessed that the acquiring company- probably paid for a good portion of that buy-out via just what they made on that land they dumped and sold and its development. They did the numbers and saw wasted space and way too much parking for the number of employees at the plant. They also, almost instantly, gave the ax to the accounting and marketing people and rolled um in to a facility they owned 1000 miles away in another state. Cause accounting for a manufacturing plant can be done anywhere with today's technology and the internet. A dude doesn't need to get a paycheck from payroll in the same building anymore. So they instantly hacked and cut that division/area to the bone and later used it to expand manufacturing space. They took an old grass field that the other company let employees play soccer on at lunch- and sold it off to a major developer who put in a multi story medical office plaza. So go figure.
Who knows what all goes on behind the scenes on these big buy-out deals. Astella can do WHATEVER THEY WANT with OCATA's assets once they buy um. Meaning maybe they already know they want the "eye" stuff and plan to break-up and sell off other parts of OCATA's IP portfolio as one example. It can go a million different ways. End result- the buyer now owns what they bought- it's there's to do with whatever they freaking want. Shelve it. Develop it and try and make a go of it. Diddle with it by sinking a few bucks into it and see what happens or even sell it all off in a few years or take it public again in 2 or 3 years on the Japanese or U.S. stock market after they clean up the balance sheet and get some trials results, any and all of the above are possible IMO.
My $8.50 worth, for whatever it's worth. Who really knows until it's done and over. Seen um go all different ways over the years.
Posts contain only my amateur opinions, personal views and thoughts. I discuss stocks as a hobby only. Always do one's own due diligence before investing.
