November 18, 2008

The greatest opportunity in Merger History is RIGHT NOW?

Private equity groups coming out of the wood works, Investment bankers out of business, credit no longer available, and stock prices massively depressed and undervalued. All of these factors combined have created the world’s most amazing climate for a private or public company to merge with a larger public company.

Right now our firm Private Equity Consultants is working with a company valued at 150 million, and the public company that they are considering merging with has had their stock price depressed from $70/share to $6 dollars a share during our bear market. Realistically in the next 5 years we believe that the long term value of the company is $40 a share. Since the private company (our client) has to be paid fair value in today’s stock price, in order for a stock swap transaction not to trigger a taxable event, thus creating a incredible upside for our client. Our client stands to gain about 8 times the current value of the company netting the owners of the company roughly a 800% increase in value for their company because they were smart enough to exit the business during this bear market. This transaction could turn our client’s $150 mill company value into $1.2 Billion in the next 3-5 years. We view this as an amazing value play, and a heck of a retirement plan.

This type of opportunity exists all over our current market. Any company that merges with a larger public company stands to make a lot of money over the next Bull Run, as long as that company has the prospect of making it firmly through our current bear/ recession filled market.

Joshua Hadley

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