Been a while since I've seen a good old fashioned MBO ... only a couple problems though. Are they wealthy enough to stump up enough equity (their own money this time) to satisfy a new lender D/E ratio from the get go? AND assuming they can pony up their own cash (along with the new partner's cash) to get funded for debt (in my example where SNDE is sold for $425M they still need $212.5M of cash and $212.5M of Debt of which $380M is used to pay off current lenders) how will they, in the future exit the business. The typical MBO future exit is IPO the new company so they can sell their equity to someone else .... some folks have long memories and other short memories. Maybe the shale business booms again and they get cash .... or not.
Disgraceful though the lack of information .... but not exclusive to SNDE.
SEA Price at posting:
16.5¢ Sentiment: None Disclosure: Held
