Friday, 1 November 2013

Carfinco Closes In On Second U.S. Acquisition


TSX: CFN
Shares Outstanding: 26.4 million
Shares Fully Diluted: 26.4 million
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Carfinco has just announced that it is the stalking horse bidder for an acquisition of all the interests in Western Funding Incorporated (WFI) and Global Track GPS out of Las Vegas, Nevada after the two companies claimed Chapter 11 bankruptcy in the courts earlier this year.

Investopedia defines stalking horse below:

Definition of 'Stalking-Horse Bid'
An initial bid on a bankrupt company's assets from an interested buyer chosen by the bankrupt company. From a pool of bidders, the bankrupt company chooses the stalking horse to make the first bid.

Investopedia explains 'Stalking-Horse Bid'
This method allows the distressed company to avoid low bids on its assets. Once the stalking horse has made its bid, other potential buyers may submit competing bids for the bankrupt company's assets. In essence, the stalking horse sets the bar so that other bidders can't low-ball the purchase price.

Carfinco is in a “no lose” situation. Should it lose the bid to another party, having qualified as a stalking horse, it is seeking a court order to be reimbursed any expenses, legal and other, incurred for the bid.

The purchase price which will be a cash offer by Carfinco, acquires 100% of the shares and all encumbrances of WFI for a cost equal to 70% of the net finance receivables at time of closing plus up to $200,000 to cure monetary defaults assumed in the bankruptcy process which will all be confirmed on or about December 20th this year.

Carfinco expects the net finance receivables to be in access of $30 million and will pay for it through cash raised in the bought deal financing back in April this year.

This deal lands on the heels of Carfinco ‘s recent expansion into the north eastern U.S. though its purchase of Persian Acceptance Corp (PAC) in September this year.  It also proves that the Carfinco is serious about acquiring key companies in the U.S. with similar business models to its own allowing it further growth and expansion in a massive market.

To view the news release.....please click here...