I believe the only reason they are raising such a sum, say US$100-150M is to effectively establish a solid strike price. You cannot attract large clients with offers of 100,000 shares. Many of these target clients deal in a minimum investment of $25M so would be looking at 1M at US$25 as an example. You would ideally want 4 or 5 such placements to optimize the IPO market. With the money they will retire the QVT debt. They will take in another $12M from QVT as payoff for their support. DKR are walking into the share holder register with a total of 2.8M shares or 5.77% currently although this will decline to just under 5% with final dilution. Note that they will now have to announce changes to their holdings. Like AGT/PE I don't expect to hear any. Having repaid all debt TZ would be left with working capital in excess of $120M or so depending on placement price/volume. They have voiced an interest in developing their own SMA facility for addressing high-end applications such as those in medical areas. The profit margin in those and similar applications runs into the 1000s% region given end cost and minimal input costs. They also want to expand the size of their engineering workforce as well as essential elements of customer interaction. The IPO will still leave them with a mass of potential and waiting customer interactions to deal with. The IPO is just the start.
TZL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
