Based on Q1 just released, I've got them running $5+ million a year in EBITDA. Is there any reason a well-managed entity like this is couldn''t easily be worth 5x EBITDA, or $25 million, less the value of the debt ($6.4 million), or $18.6 million? Divide that by 22 million shares, and you get a buyout price of 85 cents.
Or better yet, I'm patient to wait another year, and see them pay down debt more, boost earnings, and also expect that by that time, the M&A market will be a lot more "goosed." I would imagine, in a year's time, assuming results continue to improve (with the one caveat being where Fed Funds rates go) the buy out price for GAXC could be $1.25-1.50. (Assume $6 million EBITDA run rate, $4.5 M debt "back out," and a multiple of 5.5-6.0x in a take out.)
On the other hand, with the $25 million or so worth of NOL's they have, it might be better for them to simply KEEP UTILIZING that asset, and generating $25 million of income, with no cash tax payments!
I cannot find a comparable company transaction for 5x EBITDA. Can you point to specific transaction in the last 12 months that would support your argument? Or, is this more wishful thinking?
You need to consider the population of potential acquirers, which is likely to be limited. Who would be interested in paying an acquisition premium for archaic, cheap dial-up ATMs that require more cash to meet compliance standards (3DES)? I think most of GAXC's larger competitors have no interest in company.