Reality check for M&A expectations

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gcduck

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Reality check for M&A expectations

posted on Mar 29, 2008 01:01PM

I don't understand all the talk regarding SIGNIFICANT M&A activity right after the release of the Q3 numbers.

It seems as if Turley was not as successful as expected, provided his first job was the preparation and execution of a M&A. This means Goerner and Bibeau have to start all over again, maybe not from the very beginning, but they will follow their own paths. This is ONE reason, why I would be highly surprised to see any M&A announcement right after April 9th.

The other reason is the sentence in Bibeau's filing:

"200,000 of the stock options shall vest on September 17, 2008. The remaining 200,000 stock options shall vest upon the successful completion of certain merger and acquisition related criteria."

This doesn't sound as if they expect him to finalize a M&A before September 2008, it sounds as if the FIRST 200k of shares vest on 09/17/08 and the SECOND 200k will vest LATER if certain requirements are fulfilled.

Thus my (positive) time schedule after the release of the numbers - assumed the "quiet and non-communication period" is over - would be for 2008:

- PTSC announces, the OS could be reduced by 100mio shares (you know, how I dream, they have accomplished this...;-))

- 336 and 148 are confirmed by the USPTO

- the litigation with the T3 is terminated, because the T3 agree to pay

- 548 gets confirmed

- some "little" aquisitions here and there

The words of Mr. Pohl in October 2006 said, he was expecting Patriot stepping to a "serious" exchange "in three years", which would be 2009.

Thus I don't think, they plan to merge or aquire in order to move to NASDAQ now or in the next months - my guess is, they are solely looking for the best technology/product company out there, independent of its status as private or public company.

I'm confident, that PTSC can make the NASDAQ-step by its own, just by growing his earnings and growing the portfolio of interesting = promising = exciting companies.

But don't expect a "surprising M&A explosion" - at least not with the target for the NASDAQ change.