Actually, this is not as simple as it sounds (read marketsectorwatch on RB) but here is my 2 cents:
- The PPS depends on the Total Value of the Deal and the Total Outstanding number of shares at the end of the Deal.
- Given the above, then PPS = Total Deal Value/Total O/S at end of Deal
The big Q is what is the total deal value??? In my opinion it is
$38M Cash plus discounted value of Cash Flows for the next 5 yrs & beyond.
Cost of capital = long term interests rate, which is about 5%
Total O/S at end of deal will be 300M shares and CCE will own 50% plus of it. I say 300M shares as it is the total A/S and the only way CCE can be sure of getting majority ownership is to stipulate 50% plus of A/S.
To arrive at the yearly cash flow, one needs to estimate the market size and assume yearly penetration numbers. the market is $2B as per BRAVO's research and it has less than 1% of the market. So there is ample opportunity for growth!
I have not done the cash flow analysis yet. Let the investment bankers do it! I am holding on to my shares.
So at the end:
BRVO PPS : ????? but > $1, JMO
BRVO Cash: $13M plus
BRVO O/S : 300M shares
What is not given:
How much did CCE pay for acquisitions of options??
What are the underlying securities of the options?
What is value of the shares of the direct share purchases?
What is Master Distribution Rights?
