Apart from the deferral of tax obligations (which would be marginal) that was going to be my guess.... informed in large part by the large break fee and the equity claw-back clause in the event the acquirer doesn't complete the agreed transaction.When I read the full announcement, my initial thoughts were, "Mmmmm. Acquirer looks like it needs some breathing space to line up its financing ducks, so deal completion risk is not low."
There is a $1.5m deposit and a $9m tranche due on March 20. That is effectively the break fee. That $10,5m is close to the EBIT in 2022 for Sequoia ($12m)
If the deal falls over - which I don't think it will - its not the worst thing in the world to happen because Seq gets 100% of the business back and keeps the $10.5m
The other part people are missing is the business sold for $50.6m valuation. The 80% was worth $40.5m
Its a great deal and makes the rest of the Seq businesses look very cheap.
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)