Q: DNTL just announced the closing of its previously announced "bought deal" offerings. How will this impact its future? Does this signal an entry point now...or later? Thank you...five ayes!
5i Research Answer:
DNTL has raised $50M at $9.50 a share. Another $50M was sold by insiders. The company is very heavily leveraged, and with its acquisition strategy it is important for it to have different sources of capital other than debt. Historically it has lost money but is now profitable. Still, without continued acquisitions, its expected growth rate is fairly low. We would consider it OK, but with its debt and valuation (21X earnings) not hugely compelling.