I can, I can! American Science & Engineering (ASEI) is a company literally just down the road from IMSC, In Billerica, Ma, in the very same industry, security, though with advanced x-ray technology focused more on cargo. It's a perfect example of what one could reasonably expect in a buy out. ASEI was acquired by OSI Systems in June for $269 million, all cash, a premium of 25 percent, after a "strategic review" of its options. . You can go to the website and look at the press releases for details. Since the company is in the same industry and is being acquired by a company similar in many ways to L3 (assuming that's IMSC's suitor), you could on first glance extrapolate a 25 percent increase on Implant's present stock price of 48 cents and you'll put 60 cents in your pocket when and if the company is sold. But hold on! We're doing due diligence, so let's look a little closer. ASEI's sales in FY16 were $103 million, meaning the $269 million it sold for was somewhat more than 2x revenue. If Implant is sold for the same ratio, Implant would sell for around $120 million. But hold on! ASEI lost a bit of money in FY16, a total of $3.2 million, compared to a profit a year ago. That FY16 loss is not quite equal to IMSC's loss in Q2, $3.3 million, and much less than IMSC's loss of $4 million in Q4. ASEI was cash flow positive to the tune of $6.8 million; IMSC? Not reported. ASEI had little debt to speak of. Implant owes Platinum $60 or $80 million, which must be paid out first. ASEI had an excellent portfolio of patents! (Fancy that!) Great customer list, profits most years. A real company. THIS is the company you want to look to to estimate what IMSC will bring. Not that Morpho Detection also isn't a bad comparison, bought by Smiths for 2x revenue, or in IMSC terms, $100 million. Minus debt of course. So subtract $60 million or $80 million that goes to Platinum's companies, including DMRJ and, I believe, Monstant, and you've got what's left over for others, say, $60 million give or take a million. THAT's your payday. That's honest, practical due diligence, not wishful thinking. Bottom line, you can expect about 2x revenue or a bit more in any transaction in the lower echelons of the security industry. Don't look at big pharma or other industries, as they don't apply. Apples to bread. Interesting note: ASEI's Chairman of the Board, when commenting on the sale, thanked everyone, management and all employees, top to bottom, for their hard work. A victory dance of sorts. Good luck all IMSC longs. This could be the BUY signal you've been waiting for all you life.
