Is MZEI worth more as a whole or as pieces?
Ed’s work load just jumped a bunch with the preliminary success of Purdue’s work. It may be time to hire the investment bank.
What we know / believe:
1) Hospital beta testing should begin soon – the production unit is ready
2) Purdue bed bug tests continue (couple months) and hotel chain beta testing may commence
3) Laboratory studies are ongoing
4) Biohazard application status is unknown
5) Food application status is unknown
6) Patents are presumed to be issued by year-end
If MMM is interested in MZEI, they don’t have (to my knowledge) a pest control division. It would be more difficult for MMM to manage / defend the healthcare market if there was a franchise company using substantially the same equipment, serving other clients in the same local as hospital work was being done. Hence, they may have an interest in expanding into the bug business.
Would it be a good idea for MMM to acquire ROL (owner of Orkin), assuming interest by ROL which is largely privately controlled and whose senior management (family) is in their mid-60s with 3rd generation family participating in management who are in their mid 40s. If MMM then acquired MZEI, MMM could ‘control’ multiple markets. A portion of ROL’s business is bound to go away with MZEI’s application, so their value may be maximized by the transaction also. ROL has adequate geographic coverage around the world to project the bed bug application. ROL runs a good business. Would more value to MZEI for the bed bug application inure from a combination with ROL independently or with MMM also in the mix?
This is only a hypothetical, but it illustrates the work an investment bank can get started on. Presumably, we’d have multiple test results from varied markets and patents in hand by year-end. It’s not too early to engage the bank given the amount of work to do.
