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Thank you for sharing this Pinnacle, it confirms some of my...

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born2reign

360 Posts.

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20/11/19

12:45

Post #: 41529474
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Originally posted by Pinnacle: ↑

Hi all, It was a great meeting & as suspected there has been lot's going on in the background. General consensus between them is that this is a great deal to create the engine for the company that will help build the seperate pillars to profitability. NS was a prime business for purchase by a private equity company however Danny was looking for a way to grow the business further without losing it & hence when approached by OBJ was excited about the future with the BG side & new vitamin patches so it was win/win for both sides & why we are getting NS for this price rather than much more.

- The deal was instigated before the last AGM so this isn't something they have just come up with...they have been working on it for a long time
- First product under Pauls gizmo division will be for hair with a possible release around March although could be a little later
- John Palermo's finders fee will be paid 50/50 OBJ & NS. If it was PE buying in the fee would be up to 5%
- The loans to Danny will not be repaid but taken off the balance sheet after listing & taken as dividends which he will need to pay a s@#t load of tax on. These were set up that way as a private company & not unusual as a way of minimising his tax in the interim
- If a private equity company wanted to buy NS they would be paying 150m if based on the standard PE ratio of 15 where we are getting it for at a ratio of 5
- NS has already been working with OBJ in making vitamin patches which could prove very lucrative
- NS also has connections with networks in the US
- NS has 18 new products to add to it's current network of resellers
- NS take a 5m haircut off the end price for every 1m less than the forecasted revenue
- Parramatta property has a valuation of 13m we were getting it for 12m
- Bodyguard will be creating sports tapes/patches which will be promoted by the All Blacks, NRL Roosters, Perth Wildcats et al
- SS advised that if each one of the 6000 resellers sold $1,000 worth of bodyguard products in the ANZ networks then that would be 6m on the bottom line & very achievable
'- There seemed much enthusiasm for the patch with little green Pharma so Im assuming testing there is going well
- P&G have been on the phone to directors after learning about the deal
- Hopefully see an announcement today re the adjusted pricing (or at least I read it that way)

This is what they have been planning for over 12 months & hence I believe we really need to give them a go & what they said made perfect sense. Tony & Steven will be writing big cheques for more shares in the CR as they want to make money! They aren't interested in wages...they want a position which will pay them long term so I'm happy that they are putting in.

GLTA although now I don't think luck will have much to do with it......I'm convinced these guys will do well so back to a buy sentiment.

Expand

Thank you for sharing this Pinnacle, it confirms some of my assumptions RE:

-This deal being in the works a long time ago (didn't think it would be before the last AGM though)
-Planned synergies between OBJ/NS with selling patches
-Palermo fee not shafting OBJ in the way we thought it was, instead he's only shafting us 50% as bad
-The plan to move OBJ products (you mentioned BodyGuard products but I assume this could/would easily be extended to include Peros devices via Reduit as well. Why have only online sales when you can easily have online AND direct exposure via 5000+ physical stores at least in ANZ alone (for now?).
-The connection with USA networks is the big one that I've suspected was the direction the logistical network was heading. Why only push products via ANZ retail chains when you can get exposure to other countries/regions too

I wasn't aware of the plan to manufacture sports tapes/patches via these sport franchises but I was thinking even bigger then that.. if these sports stars promote KneeGuard itself then it would be a massive endorsement.

Imagine James Tedesco or Cooper Cronk or the All Blacks captain in an advertisement talking about the benefits of KneeGuard.
Doesn't even have to be a current star, a retired star with ongoing knee problems talking about it is also very powerful.

It sounds like the plan / scope of the BodyGuard division is broader than I originally thought.

I had thought that it was simply going to cover BodyGuard and the associated range of similar products - starting with KneeGuard and eventually spanning towards things like AnkleGuard, ElbowGuard, WristGuard etc., if they have expanded the vision to include sports patches / strapping tapes then the sky is the limit in that direction of sports / recovery / injury preventive measures both reactive and proactive.

I suppose it should have been obvious when they restructured BodyGuard to also include BodyCare but for whatever reason it didn't click in my head the direction they were going.

It almost sounds like a baby 3M company trying to crawl out of the womb.

OBJ Price at posting: 1.5¢ Sentiment: Buy Disclosure: Held
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