Cemtrex Inc (CETX)

[bettercallsauld]

Some thoughts on the KTCC offer:
• Cemtrex needs to raise additional equity capital to accommodate the KTCC acquisition. Assuming a 1:1 share swap ratio at current price levels, additional equity needed is roughly $40M
• Pro forma post-transaction ROE of the combined company (assuming similar NIAT levels for both CETX and KTCC) is around 19%, lower versus CETX’s existing ROE levels (low to mid forties) but still decent compared to the electronics industry average of mid-teens
• Pro forma post-transaction implied PE of the combined company would still be at the mid-single digits, and is still thus undervalued