The $10 million funding could help SNWT make another acquition similar to the County Imports deal, which is already paying off in a major way. One month internet sales driven by CI allowed the company to nearly log the same level of sales generated during Q3, which were a loft 54% higher tha the prior year period.
CI sales are higher now than they were this time last year during the company's all-time record year. In addition, this is typically CI's slowest season of the year. Mgt. will likely log County Imports revs in the $4M range in 2010, not too shabby.
If this money helps SNWT scoop up a watersports biz (PWCs are set to rebound in 2010 and there's a ton of companies just waiting to be scoooped up on the cheap, many of which could generate anywhere from $2 to $10M next year. With boat show season on the horizon, this has me excited as a long-term shareholder.
SNWT is striving to build an off-road superstore. So there's a multitude of avenues they could tread for acquistions going forward. Most firms in their line of biz don't have the luxury of having $10M in funding at their fingertips. This potential coupled with the fact that Q4 will be by far the best in corporate history and future growth potential is very promsing.
All in all, this is positive. Sure, equity financing is always an issue from a dilution standpoint. But, if SNWT can make their payments, which shouldnt be an issue given their steadily rising record sales, this will be a very useful source of capital.
The Dutchess guys are pretty savvy and likely have some ideas of their own pertaining to potential acquisiton targets. They want to ensure that they get a maximum return on their investment, employ some very bright minds and have transformed into more of a VC fund rather than a PIPE financier.
With the economic climte being what it is, many emerging small caps like SNWT would kill for this type of deal. Up nearly 20% today, here's to a solid Power Hour and close!
