HardmanAll it takes is some detailed research and analysis. The...

Hardman

All it takes is some detailed research and analysis. The content of this mornings announcement was as expected.

It was great news for the future of Intevia. It clearly signals Textrons strategic goal to concentrate on high margin value added technolgies. This will accelerate the design and production process of applications which end users have flagged a demand for. This in turn fastracks the NASDAQ listing process.

Anyone can make nuts and bolts. There is very little IP in them. Hence its a business decision to offload the low margin stuff now while its worth something. Once Intevia takes a foothold into the fastening market, the goodwill associated with the traditional nuts and bolts business will be impaired even further.

This afternoons announcement took me by surprise, yet after reading its contents, I am now more convinced than ever that we are dealing with an ingenious management team that is already planning 5 to 10 years ahead. Given that smart materials are fundamental to the technology, why not acquire a leading smart materials supplier. This way you protect yourself from competitors i.e corner the market on the supply side as well as having an IP edge and vertically integrate to earn new revenue streams....INGENIOUS.

This proposed acquisition further validates Textrons committment to the technology as they will be producing the fasteners and thus need guaranteed supply of smart materials.

Financing the acquisition now becomes interesting. To show the vendor you are serious, you would want to have the finances sorted out before you start talking. Anyone with views on this aspect?