Guys, this is going to be a dumb question to many of you, but I am asking for a specific reason. Lets say you have hypothetical Pharma company ABC where you really like their IP. The relevant info for ABC is:
Cash: $250k
Other Relevant Assets: $0
Accounts Payable: $2M
LT Debt: $300K
Income: $0
Current Cash burn: $1M/year
It is not stated, but estimated cash required to get through Phase 1 and Phase 2 testing (which would be the planned exit) is $20M
ABC is publicly traded with a market cap of $6M
Question:
If I had access to $10M in cash, what would be the best way to structure the acquisition of ABC (or at least their IP) AND hypothetically get them through Phase 1 and 2 of testing? The assumption here is that debt becomes more of an option as the ABC becomes more viable, but at this point debt is not an option.
What is the best way to structure the acquisition (and operations) if ABC is a willing partner? What if ABC is unwilling?
Any suggestions or reference material are welcome.
Thanks
Break-even EBIT?
lulzidunno
Theoretical takeover price is EV = MKT Cap + Net Debt (Debt-Excess Cash)
Yeah, I understand EV. I guess my questions are more: - Can I acquire the company, IP and key employees (less CEO) and stiff those who are owed AP? - Is there an ideal way to work with current management to restructure and come out as the owner? - Is it best just to go hostile and then start pushing? Hostile is something I have no real feel for - does anyone have any references for hostile takeovers?
Given available cash I basically want the IP and scientific team as cheap as possible. Either way, I'm going to need to take on debt, but at this point that's not even possible.
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