logo-loader

CUI Global Inc - A whole new venture

Published: 19:22 17 May 2019 AEST

CUI Global (NASDAQ:CUI) has announced a proposed deal to combine with four other businesses, currently privately held, that provide industrial services to the energy industry and other sectors. The combined business, referred to in the release as Pro-Forma CUI, will be an entirely transformed entity, with more than 3x the revenues (estimated) of the existing CUI. Current CUI shareholders will own about 15% of the enlarged group, while shareholders of the four target businesses will own 85%.

The four target businesses provide services to industries including oil & gas, utilities, and wireless communications. The combined group will become a strong player in midstream/downstream energy infrastructure, and a platform for acquisitive growth going forward.

The chief executive officer (CEO) of the combined group will be Jim O'Neil, formerly of Quanta Services. Quanta is an infrastructure services company that enjoyed very strong acquisitive growth during O'Neil's tenure in top management roles.

The CUI news release includes an outline of the proposed deal structure:

  • Issue of 160mln new CUI shares
  • Issue of US$75mln of debt instruments, and absorption of US$15mln of debts from the four businesses being acquired
  • A US$200mln earn-out payable subject to performance targets

We believe that the terms of the deal imply that the acquired companies are valuing CUI at a premium to its last closing share price of US$1.20.

What's in the report?

Financial results and forecasts
Growth drivers
Management
Market conditions
Milestones & inflection points
NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities,...

FOR OUR FULL DISCLAIMER CLICK HERE
LEGAL NOTICE – IMPORTANT – PLEASE READ:

This document is published by Proactive Research and its contents have not been approved as a financial promotion by Proactive Investors Limited or any other FCA authorised person. This communication is made on the basis of the 'journalist exemption' provide for in Article 20 of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and having regard to the FCA rules, and in particular PERG 8.12.

Where the note contains a ‘buy, sell, hold’ recommend, Proactive Investors Limited is authorised to provide investment advice as defined by Article 53 of the RAO

FOR OUR FULL DISCLAIMER CLICK HERE

OzAurum to start drilling at Boca Rica Lithium Project

OzAurum Resources Ltd (ASX:OZM) CEO and managing director Andrew Pumphrey sits down with Proactive’s Jonathan Jackson to discuss an upcoming drilling program at Boca Rica Lithium Project in Brazil, following the identification of a spodumene zone. The company plans to start drilling in the next...

2 hours, 4 minutes ago