Guest notorious546 Posted January 14, 2016 Share Posted January 14, 2016 at about 1:03 pabrai talks about wlrh. Link to comment Share on other sites More sharing options...
nikhil25 Posted January 14, 2016 Share Posted January 14, 2016 Form 8-K for WL ROSS HOLDING CORP. 7-Jan-2016 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Stand Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. On January 4, 2016, WL Ross Holding Corp. (the "Company") received a letter from the staff of the Listings Qualifications Department of The Nasdaq Stock Market LLC (the "Nasdaq Staff") stating that the Nasdaq Staff has determined to initiate procedures to delist the Company's securities from The Nasdaq Stock Market ("Nasdaq") because the Company failed to hold an annual meeting of stockholders by December 31, 2015. As a result of such failure, and the Company's failure to solicit proxies and provide proxy statements to Nasdaq for such meeting, the Company does not comply with Nasdaq Listing Rules 5620(a) and 5620(b) with respect to the annual meeting and proxy solicitation requirements for continued listing on Nasdaq. Nasdaq's delisting determinations will not immediately result in the delisting of the Company's securities. Under Nasdaq rules, the suspension of trading and delisting of the Company's securities will be automatically stayed following a timely request for a hearing pending the issuance of a written Panel Decision by the Hearings Department. The Company intends to commence such an appeal within the required appeal period under Nasdaq rules. Accordingly, the Company's common stock will continue to trade on The Nasdaq Capital Market while such appeal is pending. The time and place of any hearing before the Hearings Panel will be determined by the Hearings Panel, but the Company plans on holding an annual meeting of shareholders and soliciting proxies and providing proxy statement to Nasdaq for such meeting prior to the issuance of a Panel Decision. Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted January 20, 2016 Share Posted January 20, 2016 Ross says he sees opportunity in energy high-yield debt and, more interestingly (or "stranger" in his words), in marine transport and crude tanker shipping. Says physical demand for this glut of reserves we're hearing about will remain, and the tankers' main cost---bunker fuel---is obviously down too. Could see margin expansion with the tankers, wouldn't be surprising to see him make a play in the shipping arena for WLRHU. http://video.cnbc.com/gallery/?video=3000484156 Link to comment Share on other sites More sharing options...
ratiman Posted January 31, 2016 Share Posted January 31, 2016 VIC writeup of WLRH is informative. http://www.valueinvestorsclub.com/idea/WL_ROSS_HOLDING_CORP/137741 Link to comment Share on other sites More sharing options...
krazeenyc Posted March 21, 2016 Share Posted March 21, 2016 http://www.wsj.com/articles/wilbur-ross-blank-check-company-to-buy-nexeo-solutions-1458517480?mod=yahoo_hs&mg=id-wsj Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted March 21, 2016 Share Posted March 21, 2016 http://www.wsj.com/articles/wilbur-ross-blank-check-company-to-buy-nexeo-solutions-1458517480?mod=yahoo_hs&mg=id-wsj Nice! I had pretty much given up hope that any deal would be announced. Will be interesting to see how the market reacts given that it's a private company with limited public info. Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted March 21, 2016 Share Posted March 21, 2016 http://www.wsj.com/articles/wilbur-ross-blank-check-company-to-buy-nexeo-solutions-1458517480?mod=yahoo_hs&mg=id-wsj Nice! I had pretty much given up hope that any deal would be announced. Will be interesting to see how the market reacts given that it's a private company with limited public info. Agreed, my bet is that it'll get an oil and gas services multiple (not exactly a pretty thing at the moment). Add in the debt burden and tomorrow might be a rough day for Wilbur and devotees. Hoping I'm wrong on this. Link to comment Share on other sites More sharing options...
ratiman Posted March 21, 2016 Share Posted March 21, 2016 http://www.wsj.com/articles/wilbur-ross-blank-check-company-to-buy-nexeo-solutions-1458517480?mod=yahoo_hs&mg=id-wsj Nice! I had pretty much given up hope that any deal would be announced. Will be interesting to see how the market reacts given that it's a private company with limited public info. http://www.nexeosolutions.com/wp-content/uploads/2014/07/09.30.2015-10-K.pdf Univar is at a .58 revenue multiple and Brenntag is at about .85, so Nexeo is being purchased at .4 multiple. Link to comment Share on other sites More sharing options...
ratiman Posted March 21, 2016 Share Posted March 21, 2016 Both TPG and WL Ross still have some skin in the game (TPG will be largest shareholder, Ross will own warrants that strike as high as $15), which indicates they are in it for the long term, good news for the warrants. Link to comment Share on other sites More sharing options...
ratiman Posted March 21, 2016 Share Posted March 21, 2016 I thought the point of SPACs was to find and buy cheap assets. Actually the point is to recycle private equity assets, that's why the SPACs are so often duds. The real sponsor here is not WL Ross but the banks who get the SPAC the cash in the first place. Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted March 21, 2016 Share Posted March 21, 2016 Glad to see I was wrong here. Seems like they have a portion of the market that Dow/DuPont and the like would consider too small or inconsistent to treat as important clients. Wilbur and TPG keeping skin in the game is also a good sign. For those who are invested, are you thinking about selling at all on this small blip or are you comfortable with the underlying business and price paid? Link to comment Share on other sites More sharing options...
muscleman Posted March 22, 2016 Share Posted March 22, 2016 Glad to see I was wrong here. Seems like they have a portion of the market that Dow/DuPont and the like would consider too small or inconsistent to treat as important clients. Wilbur and TPG keeping skin in the game is also a good sign. For those who are invested, are you thinking about selling at all on this small blip or are you comfortable with the underlying business and price paid? 8.75 EBITDA. Can anyone familiar with this sector give some comments? This is a distribution company. Comparing the EV/EBITDA multiple with CHEF (14.2), DNOW (-25.78), MSM (10.97), which are the classic Arlington Value positions that are out of my circle of competence. Anyone who studies these companies, can you please share some thoughts? It looks like 8.75 multiple Wilbur Ross paid isn't outrageously high, but I can think of cheaper companies that are also in dominant positions in other sectors like fast food, cable and frozen food. Link to comment Share on other sites More sharing options...
ratiman Posted March 22, 2016 Share Posted March 22, 2016 Univar (UNVR) is the best comparison, it's about the same multiple. Nexeo has a better business (better ROTC, less volatile) but UNVR is artificially depressed right now because of oil and gas. So I wouldn't expect huge improvement in the multiple. Here is the presentation, look at the ebitda tables towards the bottom, they have to take out a ton of stuff to get to $177M. I'd say ebitda is really closer to $150M. https://www.sec.gov/Archives/edgar/data/1604416/000114420416089045/v434829_ex99-3.htm Link to comment Share on other sites More sharing options...
ratiman Posted April 11, 2016 Share Posted April 11, 2016 Wow, traded below $10 today, warrants at just 37c. This deal is a turkey. Looks like it might not get done. I sold my shares (warrants), not surprised that other people agree. Link to comment Share on other sites More sharing options...
Homestead31 Posted April 12, 2016 Share Posted April 12, 2016 Wow, traded below $10 today, warrants at just 37c. This deal is a turkey. Looks like it might not get done. I sold my shares (warrants), not surprised that other people agree. take a deep breath. this was a SPAC. just about all SPACs are owned by the same group of characters pre-deal. a great many of them are financial players - they are trading warrants around shares for the arb spread, or they are levering up and using the breakup spread as a cash proxy. when a deal is announced, these guys move on, so it is completely expected that there is some selling pressure as the holders group rotates. just because the stock trades down does not mean the deal is a "turkey" or that it might not get done. don't let the market be your master. distribution is a great business - guys like Meacham etc love distribution b/c it is capital light (how much capex does it take to keep a warehouse running once its built out?) and the balance sheet is a natural shock absorber during economic weakness b/c they can just liquidate inventory without replacing it. i haven't done a ton of work on this, but Ross is a smart, patient guy. he is buying a business in a cyclically challenged industry where capex is about to be cut by almost 50% because they just completed a few projects. the industry is very fragmented, and the strong players eat the small players in down turns in the world of distribution. my concerns would be that 3rd party distribution is not very penetrated in the chemicals world. why hasn't it happened yet? if i had to guess it is because each chemical that a manufacturer needs is chemically unique - unlike say for nuts and bolts where they are commoditized, and various suppliers compete on price, and a distributor gains economies of scale. if each chemical is unique, there is really no need for a distributor. i haven't tested this thesis - its just something i would be looking into... Link to comment Share on other sites More sharing options...
ratiman Posted April 16, 2016 Share Posted April 16, 2016 Well, most SPAC deals are turkeys, so no surprise if this one is too. Reevaluate when it goes to $7, at least it will arguably be at a decent price then. Link to comment Share on other sites More sharing options...
usdtor05 Posted April 18, 2016 Share Posted April 18, 2016 Well, most SPAC deals are turkeys, so no surprise if this one is too. Reevaluate when it goes to $7, at least it will arguably be at a decent price then. You have months between now and when it closes. It is highly unlikely it goes too far below $10...it did goes to $9.99 which is probably what you are referring to. This deal is fine, not great, but it's fine. Wilbur will get it through and in the meantime you have the chance it does trade up. Link to comment Share on other sites More sharing options...
Deepdive Posted June 9, 2016 Share Posted June 9, 2016 http://www.streetinsider.com/Press+Releases/WL+Ross+Holding+Corp.+Announces+Additional+Financings/11715729.html Seems like the deal is going to go through. The warrants are trading at 82 cents and it was trading at 30 cents late last year, that's a 2.7 bagger Link to comment Share on other sites More sharing options...
ratiman Posted June 9, 2016 Share Posted June 9, 2016 Why would anyone want this deal? Ross had to a) add more debt and b) take a haircut on sponsor shares and c) bring in an outside investor at a discount in order to make the deal happen. Even with the put the units trade below $10. Without the put, the minute the shares trade below $10 every single normal holder will have a loss and hence a reason to sell. If this doesn't immediately trade down to $7-$8, I would be surprised. And if you look at the materials, Nexeo doesn't make any money. There might be a good rationale for this deal but it's not clear what it is. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 9, 2016 Share Posted June 9, 2016 Maybe it's because I haven't read the SPAC documents in full detail, but what does it mean to "redeem common shares"? I thought the only way shareholders could redeem shares for cash was if no deal was announced. I was under the impression that SPACs were CEFs where the cash is provided upfront at the IPO and shares trade between shareholders after that. Is there some arrangement where some of these allow shareholders to force the company to tender their shares? How else does these "redemptions" impact the cash balance to get the deal done? Link to comment Share on other sites More sharing options...
muscleman Posted August 3, 2016 Share Posted August 3, 2016 Does anyone know when this will start trading as Nexeo Solutions? Trading has been suspended since June 9th. Link to comment Share on other sites More sharing options...
krazeenyc Posted August 3, 2016 Share Posted August 3, 2016 Does anyone know when this will start trading as Nexeo Solutions? Trading has been suspended since June 9th. it has been trading as Nexeo for a while now. Tickers NXEO and NXEOW. Link to comment Share on other sites More sharing options...
muscleman Posted August 3, 2016 Share Posted August 3, 2016 Does anyone know when this will start trading as Nexeo Solutions? Trading has been suspended since June 9th. it has been trading as Nexeo for a while now. Tickers NXEO and NXEOW. Thank you! Has the acquisition completed yet? I've been reading through its financials and taking some notes. https://www.sec.gov/Archives/edgar/data/1540047/000110465916111102/a16-8196_1ex99d1.htm I find it confusing on page 35 that the interest expense was 63.6 million last year. According to page 31, my impression was that the rollover debt is only 31 million. So how can this generate a 63 million interest expense? Going forward, there is 81m ABL facility and 630 term loans. The terms are: ABL facility: Borrowings under the New Revolving Facility will bear interest, at our option, at either an alternate base rate or Canadian prime rate, as applicable, plus an applicable margin (ranging from 0.25% to 0.75% pursuant to a grid based on average excess availability) or a London interbank offered rate (“LIBOR”) or Canadian BA rate (as defined therein), as applicable, plus an applicable margin (ranging from 1.25% to 1.75% pursuant to a grid based on average excess availability). Loans under the FILO facility within the New Revolving Facility will bear interest, at an alternate base rate plus an applicable margin (ranging from 1.00% to 1.50% pursuant to a grid based on average excess availability) or a LIBOR plus an applicable margin (ranging from 2.00% to 2.50% pursuant to a grid based on average excess availability).In addition to paying interest on outstanding principal under the New Revolving Facility, the ABL Borrowers will be required to pay a commitment fee in respect of the unutilized commitments under the New Revolving Facility, which commitment fee ranges from 0.375% to 0.625% per annum and will be determined based on average utilization of the New Revolving Facility Term loan: (a) a LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, which shall be no less than 1.0%, plus an applicable margin of 4.25% or (b) a base rate determined by reference to the highest of (1) the prime commercial lending rate published by Bank of America, N.A. as its “prime rate,” (2) the federal funds effective rate plus 0.50% and (3) a one-month LIBOR rate plus 1.0%, plus an applicable margin of 3.25%. So it sounds like ABL interest rate could be around 1.4 (Today's us LIBOR) + 1.5(The average of 1.25 and 1.75) = 2.9 The Term loan interest rate could be 1.4+4.25% = 5.65%. So annual interest expense could be around 81* 2.9% + 630+5.65% = 2.35 + 35.59 = 37.94. They projected annual capex of 25m, and 2016 EBITDA of 198m. So this year's FCF is likely (198-25-37.94) * (1- tax rate) = 135 * (1- tax rate) So FCF is likely 100m? Then the P/FCF would be around 9. A fair price but not great price. Am I right in these calculations? If margin improvement does happen and EBITDA margin goes from 4.8 to 6, what would the EBITDA number look like? They said on page 24 that this year's margin will likely be 5.2% and EBITDA be 220, so I thought every 0.1% improvement means 7M EBITDA. But 2014's margin is only 3.4% and the EBITDA is still 152 M, so the improvement from 3.4% to 4.8% only translated to EBITDA going from 152 to 195. ::) However, note on page 27 that from 2014 to 2015 they shedded low margin customers. If EBITDA margin improves to 6.3%, EBITDA could go up by another 120 M. Assuming the same interest expense and tax rate and 10 M additional CAPEX, incremental FCF would be 75M. Then P/FCF would be 4.5 or so. If sales also grows while EBITDA margin improves, FCF would go up more. But that's the bull case. What's the bear case? Anyone mind sharing your thoughts? Link to comment Share on other sites More sharing options...
fisch777 Posted August 3, 2016 Share Posted August 3, 2016 From the (admittedly little) I've learned, part of bear case is certainly the scenario where mfgs exert supplier power over distributors (cutting SKUs that flow through dist, for example). After all, this is the risk of operating as a distributor in a not very fragmented (few-to-few) supply chain. The distributor/middle-man value-add is by definition, smaller. Chem distributors tout "batching" and "mixing" as "value-add services", but all chem distributors do this and mfgs could certainly do this if it was worth the time and effort to serve smaller customers and/or more niche chemical blends. It seems like mfgs outsourcing the supply chain needed to serve small customers to save capital/time/resources is really the purpose of distribution here. Chemicals and dist is also a cyclical, capital-intensive business in a relatively slow-growing market. The plastics distribution business is reportedly even lower quality than chemicals. Would be interested to hear other takes... Link to comment Share on other sites More sharing options...
muscleman Posted August 9, 2016 Share Posted August 9, 2016 https://www.sec.gov/Archives/edgar/data/1604416/000162828016018773/a20160809ex991.htm The result is not good. Their presentation said the business is resilient from economic cycles but that's proven wrong. Its competitor UNVR also has declines due to lower O&G activity. Can I take long term average FCF as net income + D&A - capex? In that sense, NXEO's FCF is around 30 M. Not very attractive at this moment. I took the 9 month figures and normalized to 12 months. Link to comment Share on other sites More sharing options...
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