"An investment in knowledge pays the best interest."

TSX Penny Stocks

is a website devoted to hunting for undervalued and undiscovered TSX listed Penny Stocks.

Buying penny stocks or investing profitably in the stock market, in general, is not easy. Our penny stock investments invariably come from hard work and researching reliable sources. TSX Penny Stocks provides news and important company information so you can ultimately decide which stocks are worth your consideration.

The website offers write-ups of penny stocks and company news. Visitors can sign up to TSX Penny Stocks.ca for a free email newsletter to receive more penny stock articles, and company spotlights. Join us it’s free.

Latest News

Newsletter Sign-up

Don't Miss Another TSX Penny Stock

Subscribe

 

Hamilton Thorne Ltd. (HTL.V) has completed the acquisition of 100 per cent of the operating assets of Massachusetts-based Embryotech Laboratories Inc. for total consideration of approximately $7.25-million (U.S.). Hamilton Thorne estimates this transaction will be accretive to earnings in 2016 and is expected to add over $5-million (U.S.) of revenue and more than $1.5-million (U.S.) to earnings before interest, taxes, depreciation and amortization in calendar year 2017.

Key benefits of the transaction:

  • Significantly accretive to revenue, EBITDA and net income;
  • Diversifies and increases recurring revenue to an estimated 40 per cent of sales;
  • Expected to increase 2017 revenue by over 50 per cent (versus last-12-month actuals);
  • Expected to increase 2017 EBITDA by over 100 per cent (versus last-12-month actuals);
  • Establishes Hamilton Thorne as a leader in providing quality control products and services;
  • Opportunity to expand product offering in international markets;
  • Minimal dilution by using cash on hand and new five-year term debt at 4.25-per-cent interest;
  • Sets the stage for additional acquisition opportunities.

"Embryotech is the acknowledged U.S. leader in providing quality control services and testing assays to the ART community. In addition to acquiring a great brand, we will be strengthening the financial performance of Hamilton Thorne. Not only will this acquisition increase our scale, we anticipate that it will diversify our revenue base from a predominantly one-time sale of instruments model to a projected 40-per-cent recurring revenues from the sales of services and consumables," said David Wolf, president and chief executive officer of Hamilton Thorne.

"Combining Embryotech with Hamilton Thorne's portfolio of products and services provides Embryotech with increased financial strength, marketing expertise and access to the international markets served by Hamilton Thorne. This relationship will bring greater resources to support our current operations and growth plans, as well as provide greater opportunities to our employees," said Eric Dorman, Embryotech's president. Mr. Dorman will continue to lead Embryotech Laboratories as its president.

Transaction details

Pursuant to the transaction, Hamilton Thorne paid $6,075,000 (U.S.) in cash and issued 7,759,154 common shares of Hamilton Thorne at a deemed issuance price of 19.8 cents per share.

The aggregate share component of $1,175,000 (U.S.) was calculated based on a 20-day weighted average stock price prior to agreement date and the average U.S. to Canadian foreign exchange rate for the prior five days. The share consideration will be placed in escrow pending final calculation of certain closing adjustments and to satisfy any possible indemnity claims.

Bloom Burton & Co. Ltd. acted as financial adviser to Hamilton Thorne.

Financing arrangements

The aggregate cash component of this transaction was financed with the company's cash and a new secured credit facility from Middlesex Savings Bank. The new credit facility includes a term loan of $5.5-million (U.S.) plus a line of credit of up to $2.5-million (U.S.), $1.5-million (U.S.) of which was drawn at closing.

The revolver bears interest at the prime rate (currently 3.5 per cent), matures two years from the closing date and is renewable annually upon bank approval. The term loan bears interest at a rate of 4.25 per cent per annum, includes an escalating amortization schedule and matures five years from the closing date.

This facility replaces Hamilton Thorne's existing $3.5-million (U.S.) bank line of credit for net new borrowings of approximately $3.5-million (U.S.).