Q: Can you comment on the bought deal financing. Seems like a lot of dilution. Thanks
5i Research Answer:
It is a pretty big deal at $240M (before the 15% greenshoe allotment). But it is hard to blame the company after its stock has risen 113% in a year and 48% YTD. It has been quite active in acquisitions and we imagine it has more planned. Debt and total obligations of $1.1B before this issue are fairly high compared with cash flow of $145M. Recent earnings were solid and even with the discount on the deal the issue price only takes the stock back to where it was 10 days ago, since it has been so strong. We would expect a dip today but would not be overly concerned on this issue. We would remain comfortable buying.