Monday, September 25, 2017 9:54:38 AM
9-25-2017 Insider Owns Over 40% Of STAF: Prepare For Another Takeover Attempt?
On Thursday, September 21, we recommended a buy on Staffing 360 Solutions, Inc. (STAF), one of two companies proposing vastly improved financials based on last week's news. The stock closed at $0.84 on Friday, up a penny from our $0.83 recommendation so far. However, there is good reason to believe that STAF will be headed much higher. Richard L. Jackson, co-owner of Jackson Investment Group, claims to own 9,411,019 shares according to an SEC filing disclosed on Friday. This represents 42.2% of the outstanding shares of STAF, an increase from a 34.1% stake announced in March when Jackson first offered to buy the company out for $1.10 per share.
Not only has Jackson acquired more shares, but it was instrumental to STAF's announcement of a Transformative $40 Million Refinancing and Closing of Two New Acquisitions as the investment firm was the one to offer the $40 million debt deal. The result is that STAF will double its adjusted EBITDA to $11 million and increase annualized revenue to $265 million. That makes its market cap when trading at $0.84 look minuscule. STAF was $20 in 2014 but dropped under $1.00 and well below its book value upon the fear of bankruptcy. The refinanced $40 million 3-year note alleviates that concern for now.
With STAF and Jackson converging on a debt deal and Jackson acquiring more shares, clearly both believe that STAF is worth more than $1.10. Investors have the chance to buy in the $0.80's, a 20-30% discount to that minimum threshold price. We believe that Jackson will continue to buy on the open market since it is a substantial discount to their original offer and opens up the possibility to own a majority stake and try again for another takeover attempt. As of 8/31, there are 370,487 shares short. It would be highly advisable for shorts to cover at these discounted prices, which would accelerate any run. Jackson also has an additional reason to buy up any shares right now, as STAF must be over $1.00 in order to be in compliance with the NASDAQ's minimum listing price requirements.
A letter from the CEO outlined the details of last week's transactions:
The key takeaway from this chart is that only 2.75 million shares were issued to make it all happen. Total shares outstanding are about 18.3 million which means the market cap of STAF is only $15 million at $0.84. Senior companies in the staffing industry such as Paychex, Inc. (PAYX) trades at a 6.6x revenue multiple and Salesforce.com, inc. (CRM) trades at a 7.2x revenue multiple. Even Robert Half International Inc. (RHI) trades at 1.1x revenue multiple on the low end of the range. So a $15 million market cap with expected annualized revenue of $265 million means that STAF trades at less than a 0.1x revenue multiple. With alleviated liquidity issues, trading at 10 times below the lowest larger industry peer is far too cheap. There will be a conference call on Wednesday held by STAF to outline the details of the transaction.
I am NOT a financial advisor and anything I post should be considered only my opinion at that time. Never buy or sell based on anything I post - MY POSTS ARE ALWAYS JUST MY OPINION, regardless whether I include that in my post or not.
Recent STAF News
- Form 8-K - Current report • Edgar (US Regulatory) • 09/19/2024 09:24:30 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/09/2024 12:00:19 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/04/2024 11:58:25 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/04/2024 11:57:38 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/16/2024 08:15:16 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/12/2024 09:29:17 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/06/2024 08:08:55 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 07/10/2024 12:47:26 PM
- Staffing 360 Solutions Announces Reverse Stock Split • GlobeNewswire Inc. • 06/24/2024 01:00:00 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 06/12/2024 10:16:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/28/2024 08:05:40 PM
- Staffing 360 Solutions Receives Nasdaq Notification Related to Non-Timely Filing of 2024 First Quarter Form 10-Q • GlobeNewswire Inc. • 05/28/2024 08:05:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/14/2024 08:40:34 PM
- Form NT 10-Q - Notification of inability to timely file Form 10-Q or 10-QSB • Edgar (US Regulatory) • 05/14/2024 08:05:11 PM
- Staffing 360 Solutions Receives Nasdaq Notification Related to Non-Timely Filing of its 2023 Form 10-K • GlobeNewswire Inc. • 04/23/2024 12:05:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/15/2024 09:15:30 PM
- Staffing 360 Solutions Shifts Strategy to Focus Exclusively on U.S. Staffing Industry; Divests U.K. Staffing Business • GlobeNewswire Inc. • 02/15/2024 09:15:00 PM
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 02/14/2024 08:55:19 PM
- Several Staffing 360 Solutions Brands Receive Awards for Exceptional Client Service • GlobeNewswire Inc. • 02/07/2024 01:05:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/17/2024 11:05:43 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/12/2024 10:00:36 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/12/2024 10:00:31 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/12/2024 09:38:36 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/10/2024 01:05:37 PM
- Staffing 360 Solutions Reports Third Quarter and Nine-Month 2023 Financial Results • GlobeNewswire Inc. • 01/10/2024 01:05:00 PM
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