Grit Alpha

Share this post

De-Risked Balance Sheet From Game Changing Asset Sale

www.alphaletter.co

De-Risked Balance Sheet From Game Changing Asset Sale

Asset sale significant de-risks the balance sheet, injects much needed cash to $5mm equity stub and is meaningfully accretive to pro forma EBITDA

Grit Alpha
Feb 14
11
3
Share this post

De-Risked Balance Sheet From Game Changing Asset Sale

www.alphaletter.co

It is not often you find something like this:

  • A sub $5 million market cap company entered into a contract to sell a negative EBITDA business for $64 million.

  • The stock went up over 150% and remains undervalued with a market cap of only $13 million.

  • Pro forma results should improve to over $45 million of EBITDA should national advertising remain unchanged.

  • Additional upside as corporate costs come down.

  • Pro forma net debt to EBITDA leverage will decline from 7.51x to 5.26x should the transaction close.

  • The valuation remains in equity stub land.

  • If management can continue to execute, buy the debt below par and de-lever the balance sheet there is meaningful upside.

Keep reading with a 7-day free trial

Subscribe to Grit Alpha to keep reading this post and get 7 days of free access to the full post archives.

Already a paid subscriber? Sign in
© 2023 Grit Alpha
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing