Replies to post #203 on National Holdings Corporation (NHLD)

[glass99]

I meant to say...

Finally, one "dark horse" bidder not mentioned in the article is Ladenburg Thalmann Financial Services Inc. (LTS). While there are potential issues, they are in need of an acquisition in order to continue their top line growth.

I pressed Submit Post before I had read through the entire post.

Two more points:

First:

In my April 18, 2015 post (#173) I said, "The risk is someone will attempt to takeover NHLD before the company has adequate visibility to new shareholders. As a result, the acquiring company may attempt to offer NHLD shareholders a price that is below fair value."

CB Pharma has turned this risk into a reality.

In the post, I also discussed the factors that may have dissuaded a below fair value offer. Well, now these factors can be utilized to prevent a coerced takeover, if necessary.

See the factors here (post #173):

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=112872010


Second:

As noted in my October 7, 2015 post (#191), NHLD's Chairman and CEO, Fagenson, is now effectively on a month-to-month contract, and NHLD's President, Mark Goldwasser, will be on a month-to-month contract beginning on February 1, 2016 (a month before his term ends).

See the 8-K here (post #191):

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=117552720

[glass99]

National Holdings’ takeover value is $8/share to $14/share.

CB Pharma Acquisition Corp. (CNLM) ("CB") has bid $3.25 per share for National Holdings Corp. However, based on similar transactions, NHLD should be valued between $8 per share and $14 per share as detailed below.

An analysis of NHLD’s worth based on various multiples of NHLD from similar transactions produces the following:

Price-to-Revenue: 0.56 x $184 million = $102.8 million or $8.26 per share

Price-to-Cash Flow*: 12.25 x $8.4 million = $102.9 million or $8.27 per share

Price-to-Net Assets: 3.01 x $58.5 million = $176.1 million or $14.15 per share

Additionally, the tremendous value NHLD brings is based on its 1,100 Independent Advisors. These professionals are expensive to hire. While NHLD is very frugal, it can still take the them six-to-nine months just to break-even on a newly hired Independent Advisor. Potential bidders looking at NHLD’s Investment Advisors know two things:

1) An acquisition is a less expensive way to hire a group of Independent Advisors.
2) NHLD’s Investment Advisors are solid professionals who can perform at a much higher level.

In similar transactions, acquirers have paid $116,000 to $161,000 per Investment Advisor, which would value NHLD at $128.3 to $176.7 million or $10.31 per share to $14.20 per share.

All of these values match the $8 to $14 range calculated in post #203 and clearly shows NHLD’s value is much greater than the $3.25 per share bid by CB.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=118851700

Note: NHLD has no Long-Term Debt, but has the capacity for it. As a result, when we calculate NHLD's value based on its book value (BV) and given that similar transactions have ranged from 4 times BV to 13 times BV, it produces insanely high purchase prices. For instance, just using the lower amount produces the following:

Price-to-Book Value (excluding Goodwill): 4.0 x $58.2 million = $237.7 million or $19.09 per share


* 2013 Net cash provided by operating activities