Why I Think That NTD Is A Great Opportunity!, page-6

Assuming every bit of distribution goes across to Coopers in two years (far less than the agreemeent stipulates), you'll have earned about 40% of your outlay in those two years out of FCF.
For the remaining $65m odd, you'll free up approx. 25% of your inventory, turning into cash ($25m). Let's say $20m to be conservative. You'll likely free up some WC in the form of receivables too, but let's ignore that.

That leaves $45m, and roughly $20m in debt (that is easily serviceable)

The business is set to do over $400m in revenues - about $300m without Coopers. There would definitely be room to trim excesses if your volumes fall by 25% (employees, warehouse space, distribution costs). Even at a 3% EBIT margin, you've easily justified that cost.

I see very little downside here. It seems the market simply thinks the Coopers announcement is bad (agreed), but doesn't read beyond that.


The most important point - it's hard to lose money from here.