Ken Nagy, CFA
DecisionPoint (COMT, formerly DNPI) designs, sells, installs and services voice and data communications products and systems for private networks and wireless broadband systems to a wide range of enterprise markets, including retail, transportation and logistics, manufacturing, wholesale and distribution. The combination of its blue chip portfolio of customers as well as the reverse merger combination has the firm projecting the top-line to nearly double to $100 million.
On June 16, 2011 DecisionPoint Systems, Inc. announced that the company closed its merger with Comamtech Inc.
The resulting legal entity has been renamed DecisionPoint Systems, Inc. and will trade under the symbol “COMT.” The company will apply for Over-the-Counter Bulletin Board listing. The entire management team of DecisionPoint has become the management team of the merged company. In our opinion the merger trades dilution of the firm’s shares for the stability of a solid balance sheet and the option of future acquisitions. Further, management believes the merger serves as a building block for a Nasdaq Capital Market listing application. The financial foundation of the combined company will be stronger with reduced balance sheet risk and lower debt.
Details
The merged company has approximately 6.9 million basic common shares outstanding and 8.2 million fully diluted shares outstanding, based on an exchange ratio of 1 Comamtech share for every 8 DecisionPoint outstanding common shares held by shareholders.
On a projected pro forma combined basis, the combinations balance sheet is expected to have cash of approximately $2.5 million net of expenses with an additional $1.0 million collectible in 60 days from the closing, current assets of $24.0 million, stockholders equity of $3.4 million, total assets of over $30.0 million and $6.0 million of debt including $4.0 million under the Company’s revolving credit facility. In addition, adjusted working capital will be $4.5 million.
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