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Another bidder for Meade!

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#1 Christopher Erickson

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Posted 18 June 2013 - 05:34 PM

As promised, I have updated Meade news, minutes off of the press.

http://www.nasdaq.co...de-instrumen...

Keep the replies civil and generalized Meade-bashing would be a waste of everyone's time SO RESTRAIN YOURSELF.

Thanks,

#2 MtnGoat

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Posted 18 June 2013 - 07:11 PM

I'd sure prefer that an actual optical company picked them up.

#3 Rick Woods

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Posted 18 June 2013 - 09:00 PM

Not much info there. Any idea what their plans for it might be? I'd hate to see it dismantled and the parts sold off.

#4 Christopher Erickson

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Posted 18 June 2013 - 11:54 PM

No idea at this point who this new group really is or what their intentions are.

I don't think Meade is undervalued so I doubt if these guys are looking to buy it and strip the assets.

Let's hope that they are serious about a new vision for Meade and for keeping them in the USA.

FWIW, when Synta bought Celestron, it was good for Celestron and good for Celestron employees. And so far, Synta has let Celestron make all of their own technical, product and business decisions. Still a bummer that ownership went to China.

I sure am hoping the best for Meade.

#5 brucepech

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Posted 19 June 2013 - 12:47 AM

Here's another, longer story turned up by a Google search:
http://www.prnewswir...to-acquire-m...

#6 bicparker

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Posted 19 June 2013 - 09:29 AM

I actually think Meade is still undervalued. It has been maintaining a high book to market cap ratio for several years now. Right now, you have a net book value of ~$6.5 million ($6.0 mill if you take out the $500K of intangibles) and MIT Capital, Inc. is offering ~$4.5 million. MIT Capital, Inc. specializes in companies dealing in optical and technical measuring instruments.

They could:
1) liquidate and get a reasonable profit through their established distribution channels (Meade's high inventory levels gives some sense to this).
2) use Meade assets to provide finished materials for their other optical and instrument investments or for other related entities to their investments.
3) add this to their existing portfolio of similar companies and keep it in the amateur astronomy business.
4) Since this is an all cash deal, they may likely be able to grab some immediate tax benefits from a portion of Meade's NOL carry forward.
5) do some combination of 1), 2), 3) & 4).

I suspect the last option is most likely because after such a purchase, most investors will want create some liquidity first. That might mean, for instance, selling off Coronado, making a wholesale deal or two on the existing inventory, licensing their patents and trademarks to other manufacturers, etc. But this does not have to be done at the expense of eliminating Meade, but it will certainly restructure it. The NOL carry forward could be a real underlying bonus for MIT Cap in this combination.

This is an investment group, not a turnaround or restructure group like Hummingbird was for Meade. This means they want to invest, get a good return, and probably move on. Meade is not perceived as a premium investment right now. They have no liquidity and are overdrawn at the "bank" (as noted in some of the 8K releases), their supply chain is essentially frozen, their existing inventory will barely cover bills, and it is early summer when sales are probably at their lowest.

MIT Capital is making this an all cash deal, which is a much easier deal to consummate compared to the JOC North America bid. It also has several possible tax advantages, as I mentioned earlier. JOC NA apparently has a ongoing business model prepared for Meade, which makes sense because this is the business that they are already in. MIT Capital is paying hard cash and will want a pretty quick return on such an investment, I suspect. Return requirements for investment capital are generally very high (i.e., several times higher than loan interest rates).

Things are going to be interesting for Meade over the next several days. I suspect something will happen rather quickly here, especially given Meade's current lack of liquidity.

#7 ken svp120

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Posted 19 June 2013 - 11:15 AM

I too was wondering about the potential use of NOL carryforward. And as you point out, MIT would seem to be in this deal to make a profit and move on. It would not suprise me to see the end result being a combination of your #1 & #4. I just don't get the sense that they want to come in, fix the company, hold it mid- to long-term, and returnd it to profitable operations. Hopefully I'm wrong but also as you said, I would expect to see something happening pretty quickly given the status of Meade's negative financial position...they don't have time. It would have seemed more advantageous to recognize their position and start this process about 6 months ago.

#8 brucepech

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Posted 19 June 2013 - 07:03 PM

The deal is now being discussed at length in the Cats & Casses Forum. I suggest referring to the thread there and locking this one. Bicparker in particular appears to be knowledgeable about PE and M&A financing and may wish to repost to Cats & Casses.


#9 Starhawk

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Posted 19 June 2013 - 07:38 PM

Especially since Cats and Casses is talking about seeing if CN members can mount their own buyout attempt.

-Rich

#10 LoveChina61

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Posted 19 June 2013 - 08:54 PM

The Meade brandname in and of itself carries a lot of Goodwill value that has been built up over decades of being a prominent scope maker. The buyers would be throwing away a lot of intangible $ value if they just tore the company up and sold off its assets without continuing to make scopes and get maximum value out of the Meade brandname. I doubt very much they will destroy the company.

#11 Christopher Erickson

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Posted 16 July 2013 - 06:46 PM

The plot thickens!

http://www.nasdaq.co...gns-new-deal...

#12 Digital Don

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Posted 16 July 2013 - 09:04 PM

Hmmm...

Here are some of Ningbo Sunny Electronics' current telescope offerings

Reminds me of when Tasco bought Celestron...

Don :usa:

#13 dogeddie

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Posted 18 July 2013 - 09:07 AM

The deal is now being discussed at length in the Cats & Casses Forum. I suggest referring to the thread there and locking this one. Bicparker in particular appears to be knowledgeable about PE and M&A financing and may wish to repost to Cats & Casses.


They are beating that topic to death. To me it's turned into more of an "I know more about business than you do" :rolling:

#14 Rick Woods

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Posted 18 July 2013 - 02:17 PM

Hmmm...

Here are some of Ningbo Sunny Electronics' current telescope offerings

Reminds me of when Tasco bought Celestron...

Don :usa:


Well, it could be different.
Firearms maker Smith & Wesson was floundering a number of years back, and was bought up by a small company in Scottsdale, AZ that made some sort of lock accessory for handguns. The ant swallowing the elephant. But it turned out well, and S&W is now once again making some of the finest guns in the world, including the most powerful commercially available handgun in the world (the .500 Magnum).

#15 Digital Don

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Posted 18 July 2013 - 08:22 PM

I hope it works out for Meade. While all my current Schmidt-Cassegrains are from Celestron, I've owned Meades as well. We are the ones who ultimately benefit when manufacturers must compete.

Don :usa:

#16 Christopher Erickson

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Posted 23 July 2013 - 05:09 PM

UPDATE

http://www.sacbee.co...nder-offer.html

#17 Christopher Erickson

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Posted 27 July 2013 - 07:09 PM

More news:

http://articles.lati...ruments-2013...

#18 Whichwayisnorth

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Posted 27 July 2013 - 09:14 PM

More news:

http://articles.lati...ruments-2013...


How interesting that they lay the blame on everyone but themselves in that article. Of course that does explain a lot doesn't it?

#19 Christopher Erickson

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Posted 27 July 2013 - 09:34 PM

More news:

http://articles.lati...ruments-2013...


How interesting that they lay the blame on everyone but themselves in that article. Of course that does explain a lot doesn't it?


It looks to me that 95% of the opinions presented in that story come from the reporter and are not quotes from Meade executives.

#20 cn register 5

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Posted 28 July 2013 - 05:23 AM

From what I can see in the UK there's no problem with declining interest in amateur astronomy or buying astro kit, quite the contrary.

My Astro Society is thriving and there's a new telescope dealer just setting up locally.

"Stargazing Live" helped but the continual presence of "The Sky at Night" has maintained the interest in amateur astronomy here.

Maybe the downturn in interest in astronomy is just in the USA.

Chris

#21 Rick Woods

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Posted 29 July 2013 - 10:06 AM

From what I can see in the UK there's no problem with declining interest in amateur astronomy or buying astro kit, quite the contrary...

Maybe the downturn in interest in astronomy is just in the USA.


That's interesting. It calls to mind the usual culprits, e.g. kids are too into media overload to bother with boring old observing, etc etc. Are young people in the UK glued to their smart phones/ipads/computers 24/7 like they are over here?

#22 cn register 5

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Posted 29 July 2013 - 03:50 PM

I'm not sure I can get away with saying this on CN but the impression I get is that there's a lot of hostility to science in the USA.

I don't know many UK kids but the ones I know are sensible, rational people - they have smartphones but use them as what they are, tools.

Chris

#23 nitegeezer

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Posted 29 July 2013 - 07:59 PM

I work with our local school a lot. I was shocked when I saw the library go away. The elementary school still has a library, but the jr/sr high school kids never refer to books anymore, as far as they are concerned if it is not on the web it is not worth the time to read. I think it is great that they are so comfortable with technology but it is sad they are so dependent on it. If they do a search for a subject and the first page they look at does not have the information they need, then they claim they have looked everywhere. And as far as science goes, the teachers have to be very careful about some subject matter.

That being said, we have had a bit of thread drift. This subject may be better suited in it's own thread so the mods don't have to pull us back in.

#24 Christopher Erickson

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Posted 30 July 2013 - 12:04 AM

Yes, let's keep this thread on-topic.






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