BATM Advanced Communications Ltd. (LSE: BVC) has acquired IP surveillance and security solutions vendor Vigilant Technologies Ltd. (AIM:VGT) for £845,000 in cash. The price tag is barely 3% of Vigilant's IPO value in late 2005, when it raised ₤10 million at a company value of ₤22 million.
BATM is offering ₤0.013 per share for Vigilant, a 126% premium on today's market price of ₤0.0058. Alternatively, shareholders can accept a price of ₤0.016 per share payable in BATM shares through August 13. If the shareholders opt for the share swap, the price tag for Vigilant will be about ₤1.04 million, based on BATM's share price of ₤0.46. The premium in this case is 178%.
Whichever deal Vigilant's shareholders chose, it is fire sale. Although they will make two to three times the current value of the shares, this is little consolation, given the collapse in value since the IPO. The share will be delisted from London’s Alternative Investment Market (AIM) when the sale is closed. Trading in Vigilant was suspended on June 27.
Vigilant Technologies' solutions are designed for the high-end CCTV security and surveillance markets. The company suffers from liquidity problems, was unable to raise capital, and decided to find a buyer rather than to try to survive independently. The company posted a pretax loss of $7.4 million and had $6.8 million in gross assets in 2007. The company's board advises the shareholders to accept the cash offer.
The acquisition of Vigilant is not a problem for BATM, which had $64.6 million at the end of March. Its share has risen 54% since January, giving a company value of ₤183 million. The share fell 7.4% in morning trading today to ₤0.47.
Published by Globes [online], Israel business news - www.globes-online.com - on July 8, 2008
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