Anita- during the CC, MCG actually got a bit disturbed over the possibility of exclusivity with a single AIT maker. His voice inflections changed, his tempo, his tenor and his emotions were thru the roof ( relative the balance of CC).
Was he negotiating via the CC? Don't know, but it portends an equity sale ( to the AIT maker who directs the workflow for ETD to AIT linkage). He also set the value point for the INLINE very high by targeting linkage to ALL AIT makers.
The only thing that would trump an equity sale to an AIT partner would be a total buy out by the AIT maker AT the specified price. You could also here a market sizing calculation was under way when they pegged "security-screening" sales at 1.5B over the next X # of years.
Here is the nugget of ISC leverage: TSA is sitting on about 250-500M in AIT upgrades, plus a significant opportunity for fill out of ISC's ETD IDIQ of at least another 70-100M. I contend the first AIT maker w/ integrated or integration ready AIT/EDS gets more than the lion's share of the first with all of the IDIQ for ISC being spent very quickly. Conservatively estimating that 350M= 40% of the world wide market, you can now guess what ISC's "Jewel box" of ETD products are worth.
But as usual, TSA uncertainty makes the deal dangerous for a small to mid size player...so who knows which way it goes.
The fall backs are done deals if we want them to be: more DM on slightly better terms and the RCA pay day loan deal to prevent a draw from DM. IF DM's serial dilution formulae is NOT fully stoppered, the SP will stink like rotting fish...
IF all the parties sitting at the table will open their eyes, think outside their "silos" and look at what the world wants, THEN a full on purchase of ISC is very easy to contemplate AT ISC's desired price. This is NOT that hard unless someone wants to make it so...
