Dmatek Ld Share Discussion Threads

[spudders] 05/1/2009 19:36

Fun - (T) If reporting a single protected transaction.Buyer/seller wants to keep the trade anonymous. Who ever it is is done as the market now knows.

Spudders

[funchalman] 05/1/2009 19:25

unusual activity on plusmarkets ,160,000 shares traded last three , T trades,at 75,000, 25,000 and 25,000 shares all at 200p,so must be BUYS.
use to know what a T trade was but cannot find my bit paper listing the various types of trades,possibly transfer trade.so what do we make of that,
francisco partners getting in some shares,someone else buying for a potential bid,or someone just wanting the 215p in march,or elmfield hit the bottle,sorry elmfield ,just having a laugh.

anyone got any ideas?,dont think it could be buys on the open market otherwise the price would have soared.

[elmfield] 05/1/2009 16:19

yes I would like that sort of money, say 265, but I suspect we won't get that far but no question about it, we are worth a bit more than what we are getting!

[gerdmuller] 05/1/2009 14:13

I've worked in the PE market for a good while now and in that time seen some massive profits made. PE firms make their money by leverage and financial engineering, by aligning management with ownership, operational efficiencies, multiple arbitrage and of course exploiting disorganised investors.
PE firms don't generally make gains by asset stripping and shedding jobs as is the popular view.

If they get this for £52m they could probably use about £30m equity and £22m debt. This firm has generated high cash flow (that's why they want it) which could pay for both interest payments and for growth.

They may use the $12m of cash for acquisitions or they could easily pay themselves dividends if cash flow remained strong and the debt providers agreed. That could reduce their equity exposure to around £25m or less.
In a short period these could easily be on earnings of 30p. If they got their marketing people to work they could offload this on a multiple in the high teens if growth had remained strong. At a PE of 17 that would be 510p in a short period. Market cap of over £110m and once the £30m debt is paid back that would leave equity investors with £80m from about £25m left invested, about a £55m profit. That's leverage and multiple arbitrage for you, they don't need the rest.

If markets do remain tight and they can't offload it in a few years they still have a fantastic cash generator.

They have already had a 25 percent currency advantage they could easily pay another 25 per cent and still make a massive gain.

[elmfield] 05/1/2009 13:32

I sent link to article to company sec,
I am not sure this is game over just yet, still worth holding for the 215 anyway, imv.

[sammu] 05/1/2009 13:18

"Prices soon began to creep back up in spite of generally listless trading conditions. They gained more than 20 per cent in just 22 trading days. It was a clear signal to sit tight with my position."

I thought the clear signal was the RNS saying they were still in talks with a number of other parties! ;)

[elmfield] 03/1/2009 18:46

AND THEY CAME ASKING ME IF i WOULD SELL AT 195p Last week, er no thank you, holding on very tightly.(:-

[elmfield] 03/1/2009 18:44

easonal trends vary in reliability. Happily, those that occur near the year-end are more consistent than most.

Since its inception in 1984, the FTSE 100 rose 23 times in December's second half versus just two declines. It is not a perfect record but a 92 per cent success rate is about as good as it gets in the world of investing.
EDITOR'S CHOICE
Trader's diary: More columns from David Schwartz - Oct-27

Once the New Year break ends, two additional trends appear with monotonous regularity.

For January as a whole, history teaches that prices often rise in bull market years. They rose 25 out of 29 times since 1971 if a bull market was running at the start of the month. Three of the four exceptions were small declines of 1 per cent or less. This is equal to just 44 points or less on today's FTSE 100.

Unfortunately, January's bear market trend is equally powerful and runs in the opposite direction. There were nine bear market Januarys since 1971. UK shares declined eight times.

So if you believe, as I do, that the bear market of 2007-8 is probably over, history signals good prospects for the month ahead. But most profits in January appear in the second half of the month. The period from January 5-13 typically gives investors a bloody nose. The record since 1990 is one advance versus a whopping 18 declines.

Short-term trades based on trends such as these are not risk-free, of course. After all, no trend runs forever. But, for the moment, both January trends are red hot.

Random Walk fans will smirk. Their mantra is to dismiss repetitive patterns such as these as random occurrences. But most impartial observers would probably agree with me that 18 early-January dips in the last 19 years does not look or feel like a random event.

As far as my own trades are concerned, I often find good buying opportunities among shares that look strong when the broad indices are weak. My current position in Dmatek is a good example. This small company is a world leader in the electronic people-monitoring technology industry.

Its shares drifted in the 115p area as recently as September 30. A surprise takeover attempt on October 7 drove prices up to 145p. But the deal soon fell through and prices quickly returned to their starting point.

Prices soon began to creep back up in spite of generally listless trading conditions. They gained more than 20 per cent in just 22 trading days. It was a clear signal to sit tight with my position.

The reason for the rise became clear last Monday when Dmatek announced it had agreed to be taken over at a price of 215p.

I now must decide whether to take substantial profits or hold out for the full price that will come my way in a few months. I often quickly sell after a takeover announcement. My preference is to settle for a smaller profit and avoid the risk of a failed takeover. But Dmatek's sales are booming in a sector that has explosive growth potential. If there was ever a company ripe for a counter bid, Dmatek is it.

An additional point worth considering is that the shares now sit about 10 per cent below the take-out price. Given current low interest rates on offer, gaining 10 per cent by holding my shares for a few more months is an appealing option.

[elmfield] 03/1/2009 18:37

FT today, money section, D schwartz has a bit to say about this (:-

[rivaldo] 01/1/2009 17:35

Nice posts gerdmuller, thx.

I remain hopeful that LMS will come back again (or one of the "several" other bidders). Whatever happens, I can see no earthly reason to sell now and forego the additional consideration due fairly shortly, especially in these markets, and especially as DTK is such a bargain at this price that I'm sure the takeover will go through.

[funchalman] 31/12/2008 20:02

reference last few posts from gerdmuller,glluckett2,holts etc,

yes gerd recognise what you are saying there,about clauses etc but feel they might have used different wording if it was a soft irrevocable,remember also that sometimes there are clauses meaning the company have to pay a penalty to the bidder if a bid is accepted later from a different bidder.there is a lot we dont know,maybe it will come clearer once we get the offer documents.dont know if i will get them as all my shares together with the wifes are held in nominee accounts,although i think the rules have been relaxed lately.another thing to remember, is that this takeover is under israeli rules,what ever they are.
as regards the valuation gap,that has been obvious for a long time now, unfortunately it seems the shares got a bit of a reputation amongst private investors as a good sell after any rise on good news.the fact that dmatek had changed over from signing one off deals to lease agreements didnt seem to register.final straw is probably protech monitoring,a business transforming deal,and the company valuation remains the same or has even dropped.dmatek want to make more aquisitions and i think thats what management have in mind with this deal,as well as giving the large shareholders a way out if they want.
another bid would certainly light the fireworks,one can only hope

[holts] 31/12/2008 17:16

or its a good way for us with options to get out with a sizeable wedge , thanks very much.

[glluckett2] 31/12/2008 17:05

I emailed the content of my post 987 to Dmatek and have now had a very polite response from the Manager of Communications.
It seems the valuation gap that I described was a key factor in the Board's decision to bring the bid proposal to shareholders to decide on. The board were concerned that the public market did not recognise the underlying value of the Company (true of many Companies today I believe) and the proposed transaction offers a way to create value for shareholders and to provide the Company with strong financial backing for the future. So there you have it !

[gerdmuller] 31/12/2008 16:19

And of course even if no other bidder came in shareholders could still vote no.

Looking at this on a pe of just 12 and peg of 0.2 they may then have to raise their offer price seeing as they are already getting it much cheaper after the big fall of the pound against the dollar in the past few months.

They will be probably looking to ipo on Nasdaq in 4 to 5 years but they certainly wont be doing that on a multiple of just 12. No way Pedro.

[gerdmuller] 31/12/2008 16:02

funchalman, the level of irrevocables at 21 percent is not particularly high as going privates done by PE companies have generally had about 35 to 40 percent in the last 10 years on average.

Also, they often have a clause which states they are irrovocable to the extent that no other bidder comes in. These so called soft irrevocables allow the owner of the shares to accept a higher bid if it comes in.

[funchalman] 31/12/2008 12:27

elmfield,cant blame the management for actually selling the company,the shareprice has been woeful and has undervalued the company for sometime now.the protech monitoring purchase was a very good buy,but the shareprice has no way reflected that.my guess is that once the deal is completed in march we will see dmatek on the aquisition trail again.longterm it will probably be floated again,but i doubt it will be on the lse.

anyway looks like this story is just about wrapped up.

a happy new year to all dtk holders

[elmfield] 31/12/2008 11:41

Agrre, another offer could still come but not likely though there is buying at 200p, then again that is a 5% return in a couple of months!!

[elmfield] 31/12/2008 11:40

I had this back from company sec Idit in reply to my question pasted earlier:



We appreciate your unrelenting support in Dmatek's business, yet the deal as
proposed can not accommodate that.

We believe the proposed transaction offers a way to create value on both ends -
current shareholders will benefit from an opportunity to cash in on their investment
at a significant premium, whereas the company will be able to continue to operate
with a strong financial backing.

Please do not hesitate to keep in touch, and have a very happy new year!

[funchalman] 31/12/2008 11:09

have just noted the word "irrevocable" in the press release for the takeover as regards the shareholders not reinvesting , representing 20.8 percent of the
total shares.i take that to mean they cannot change their minds about their undertaking to vote yes.with all the directors voting for it(that includes one inflexion director and inflexion are supposed to hold 18percent) i have come to the conclusion that another bid will be very unlikely in the circumstances.
it seems done and dusted and its just a matter of waiting for the £2.15.
or to put it another way,its all stitched up.

[cambium] 30/12/2008 17:33

Dmatek said today it has agreed to be bought for �52.9m by a group led by Francisco Partners.

Dmatek shareholders would receive 215p per share in cash, representing a premium of 82% relative to the last unaffected closing price of 118p on 6th October 2008 and 72% relative to the average closing price of the 30 trading days prior to and including 6th October 2008.

Certain current shareholders including clients of Cavendish Asset Management and CEO Yoav Reisman are supportive of the transaction and will remain shareholders by reinvesting with the new investor group which, in addition to Francisco Partners, includes Sequoia Capital Israel.

Yoav Chelouche, Chairman, said, 'We believe that this transaction presents our shareholders, customers, employees and partners with an exciting opportunity. The Board of Directors has evaluated the Company's strategic alternatives and, after significant work, decided unanimously to endorse this transaction as being in the best interest of our shareholders and recommends that it be approved by them. We believe that this transaction recognises the value of Dmatek's unique market position and product portfolio and provides our shareholders with an attractive cash offer.'

Deep Shah of Francisco Partners said, 'Francisco Partners is excited about the potential growth opportunities in Dmatek's core markets, and is pleased to partner with the company to support its long-term growth strategy. We also believe that Dmatek has a highly talented and committed team and we look forward to working with them to help the company achieve its full potential.'

[elmfield] 30/12/2008 13:57

how strange, they bid 195 for 20k from me but I ain't selling any.

[holts] 30/12/2008 13:43

very odd , can buy 10,000 online at 2

[funchalman] 30/12/2008 12:24

its about as done as it can get in my opinion,and thats why i will not sell out now, i will wait for every penny.someone mentioned the £3.30+ in the dotcom boom,thats one side of the insanity of markets and we are now seeing the insanity of the markets at the other extreme.dtk is worth far more,thats obvious,but markets dont always price in the obvious.what we need is another bid,to really shake things up and get a price that does some justice to the true worth of dtk.if one is to come it will probably have to be in the next couple of weeks,so keep on checking the news feeds!

[tweeeek] 30/12/2008 11:33

Could anyone please explain why if this is a done deal at 215 then why can I still buy at 200? Is it a done deal?

[elmfield] 30/12/2008 11:03

MMS WANT STOCK,,,?
wonder why?....?