Evans & Sutherland Computer Corporation (ESCC) – Merger Arbitrage – 4% Upside

Current Price: $1.14

Offer Price: $1.19

Upside: 4%

Expected Closing: Q1 2020

Press Release

 

A quick note on a freshly announced nano cap merger with attractive IRR.

Private equity investment firm Mirasol Capital is acquiring a producer of digital planetariums Evans & Sutherland for $14.5m or $1.19/share (105% premium to pre-announcement price) via a tender offer. The starting and expiration dates are not announced yet. The transaction is conditioned on >50% shareholders tendering, however certain shareholders owning 51.1% have already agreed to participate pretty much securing the closing. The remaining shares would be acquired through a second step commenced right after the tender offer expiration.

It is hard to comment on the risk that the buyer might withdraw. There is very little information available on the Mirasol Capital, while their affiliate Elevate Entertainment (the buying company) is some minor Hollywood talent management firm.

 

 

 

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