LII.TO - Logan International

[no_free_lunch]

Logan Intl is an oilfield services and equipment company.  It was formed in current shape via merger in early 2010.  Since then it has roughly doubled EBITDA/free cash flow mostly via acquisitions.  The acquisitions have occurred without issuing significant new shares (low single digit dilution) and with very modest debt levels.  Total debt is less that current assets (which include inventory) or another way to view it, long term debt is about 2.5x free cash flow.  The equity currently trades at about 9x free cash flow or an 11% yield.

 

Despite it's Canadian listing the company is international and looks to be based out of the US.  Due to it's small size and canadian listing it trades at a  nice discount to larger peers.

 

The company is over 50% owned by a PE firm Cadent Energy Partners ( http://www.cadentenergy.com/ourapproach.asp ) .  There are positives and negatives to such a substantial owner but with a small cap I prefer it as it keeps the company aligned with shareholders.

 

This is about a 5% position for me while I do more research.  If anyone has anything to add on this one I'd love to hear it.

[Voodooking]

I bought some shares in this stock at the beginning of the month, when it was trading at 0.70 CAD (Approx 60% of NCAV), today an announcement regarding the sale of the company has been made and the stock price has risen to 1.49 CAD (Approx 130% of NCAV!).

 

I’m very excited by this news! I’ve had some moderate success with Net Nets so far, but this is the first time I’ve seen 100% return and doubled my money.

 

My question is, what do I do now, do I sell out, or hold on in the hope it might go higher?

 

Link to the news story regarding the takeover: http://www.marketwired.com/press-release/logan-international-inc-announces-all-cash-sale-to-rubicon-oilfield-international-tsx-lii-2153790.htm