Correction! CAMP has given LOJN shareholders a 200% yearly increase by buying them out! If LOJN management had had their way, they'd continue to draw salaries and watch the shareholders' shares continue to be stagnant. Calamp has a new strategy to increase its shareholder value, and LOJN's technology is part of that new strategy.
Spanspur, LOJN has nearly $19 million in cash, and little debt, your argument regarding the loan interest expense is feeble at best! Calamp would not be pursuing this deal so diligently if they weren't impressed with LoJack's synergies, especially when modified with Calamp's state-of-the-art equipment, and, in short order, accretive to their bottom line.
Spanspur, Juddy1 did a nice job of assessing LoJack's present outdated equipment, and the improvements and cost savings Calamp could realize by immediately installing their own state of the art equipment in newly acquired vehicle fleets. It's obvious that Calamp is going after LoJack's subscriber base, which is essential to higher margins in the fleet tracking business.
A tremendous move by Calamp to announce early; I'm just guessing, but I expect shorts were in the process of trying to drop the share price like they did the previous few quarters right before the earnings call, then cover right before earnings; however, this time Calamp caught them with their Shorts down, and hit them where it hurts; then the one-two punch - announcing the offer to LoJack - sheer genius! With over 3 million short shares out there, this looks like the monster of all short squeezes! This company is really on the ball! - Great job management team! JMHO!
luckyjim, just read LOJN's last conference call transcript, and you'll see why this is a really nice fit for Calamp; look for the words "subscriber base", "telematics space", "international expansion", "50% gross margins", and "little debt" ; these are all great reasons why Calamp is interested in LOJN.
Juddy1, this is exactly what the street wanted to see Calamp execute rather than sitting on their borrowed cash; yes the interest rate of the loan was very low; but if they can grow their business exponentially through this purchase, this immediately adds investment power to CAMP!
It appears that the Crashboxx acquisition is already paying off; Mike Burdiek, in his Q&A at the company's most recent conference call stated:
"Over the last quarter or so we’ve had some very, very interesting conversation as it relates to crash detection and damage estimation technology that we believe we have now in our possession through the Crashboxx acquisition and we’re seeing that the application of that technology is actually probably a lot more broad-based than just the insurance segment. We’re seeing interest from existing fleet customers, we’re seeing interest -- keen interest from companies who manage lease fleets, we’re also seeing a little bit of interest in the rental car market and we believe that we now have in front of us a multitude of options as it relates to monetizing that technology.
So where we’re today is investing in some additional product development activities as it relates to not necessarily so much the algorithms or the crash detection technology itself, but the means to deliver it through multiple channels both directly through and insurance telematics service provider, but also indirectly potentially over the top two existing device customers in the fleet and car leasing marketplaces."
Just a guess, but this looks like it is both an investment in a startup and an investment that will use their own technology to contribute to that startup; it sounds very promising to Calamp's bottom line.