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Blog Coverage: TSR Receives Takeover Proposal from Zeff Capital

Upcoming AWS Coverage on Automatic Data Processing Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 23, 2017 / Active Wall St. blog coverage looks at the headline from Hauppauge, New York based TSR, Inc. (NASDAQ: TSRI) as the contract computer programming services Company announced on May 19, 2017 that it had received a takeover proposal from New York based investment firm and a Delaware limited partnership, Zeff Capital L.P. Zeff Capital is an existing investor and owns approximately 7.2% stake in the Company. Register with us now for your free membership and blog access at:


One of TSR's competitors within the Business Software & Services space, Automatic Data Processing, Inc. (NASDAQ: ADP), announced on May 03, 2017, its financial results for Q3 FY17 and provided an update to its FY17 outlook. AWS will be initiating a research report on Automatic Data Processing in the coming days.

Today, AWS is promoting its blog coverage on TSRI; touching on ADP. Get all of our free blog coverage and more by clicking on the link below:


The takeover offer

On May 18, 2017, Zeff Capital had filed an amended Schedule 13D with the Securities and Exchange Commission (SEC) which revealed that the investment firm had sent a letter of interest to TSR on May 17, 2017, indicating its interest to acquire all the outstanding shares of common stock not already owned by it. The offer was made on behalf of Zeff Capital's affiliated investment funds. The investment firm offered to pay for $6.15 per share in cash for each TSR's share. The offer price represents a premium of approximately 27% of TSR's closing stock price on May 17, 2017, the day Zeff Capital shared its intent.

The letter only indicates the intent of Zeff Capital to engage in the discussions for takeover and is not the final proposal. The offer is subject to the completion of due diligence, completion of a financing plan, negotiation of mutually acceptable definitive agreements and the satisfaction (or waiver) of the conditions put forth at the time of signing the agreement. TSR has shared Zeff Capital's letter with its Board of Directors for discussion and review.

In the event that TSR does not accept Zeff Capital's offer, the investment firm has suggested that TSR should pursue the sale of its business. Zeff Capital even offered to connect TSR with interested investment banks. Zeff Capital has also indicated that in the event of TSR refusing the proposal, it would pursue all necessary options to protect its investment and achieve fair value for its investment.

Zeff Capital's rationale for takeover

The letter was written by Daniel Zeff, General Partner, Zeff Capital and addressed to Joseph Hughes, TSR's Chairman of Board gives a detailed list of the reasons for its takeover offer. The excerpt from the letter reads:

"Zeff Capital has been a loyal, long-term investor in TSRI for more than a decade, but our patience has run out. TSRI's management has been unable to achieve profitable growth, producing a mere $200,000 in cumulative net income over the past five years from fiscal 2013-2017..... At the current price of $4.85 per share, TSRI's stock is trading for a pitiful enterprise value of $3.4 million, on $60 million in revenues and $10 million in gross profit per year. That is a ridiculous valuation for a US listed Company and it is due to lack of faith and trust in management."

Zeff Capital has been disillusioned by the fact that for the period from fiscal 2013-2017 TSR has not paid any dividends to the shareholders although it has continued to pay hefty salaries and bonus to its top management. Zeff Capital is also not impressed by the valuation and performance of the Company. TSR had indicated in February 2017 that it would explore strategic options and retain the services of an investment bank to guide it. However, these options were not pursued by TSR and have been put on the backburner. Zeff Capital has indicated that it is confident that the change in top management after Joseph Hughes retirement will not have any major change in TSR's future growth prospects and will only add to the shareholders' woes.

Stock Performance

At the close of trading session on Monday, May 22, 2017, TSR, Inc.'s stock price rose 4.17% to end the day at $6.25. A total volume of 17.43 thousand shares were exchanged during the session, which was above the 3-month average volume of 6.61 thousand shares. The Company's share price has soared 28.87% in the past one month, 5.93% in the past six months, and 75.56% in the previous twelve months. Shares of the company have a PE ratio of 32.72 and currently have a market cap of $11.44 million.

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SOURCE: Active Wall Street