Investorfile Blog

Category
Investorfile.com (63)
Boardwalktech Software Corp. TSXV: BWLK (1)
EcoSynthetix Inc. TSX: ECO (1)
Destiny Media Tech. TSXV: DSY (2)
Novra Technologies Inc. TSXV: NVI (2)
Gatekeeper Systems Inc. TSXV: GSI (2)
AirIQ TSXV: IQ (5)
Intouch Insight Ltd.TSXV: INX (2)
Quorum Info. Tech. Inc. TSXV: QIS (9)
Sangoma Technologies Corp. TSXV: STC (12)
Avante Logixx Inc. TSXV: XX (9)
The Caldwell Partners Int. Inc. TSX: CWL (10)
Questor Technology TSXV: QST (10)
Titan Logix Corp. TSXV: TLA (9)
Posera Ltd. (3)
Intrinsyc Technologies (11)
Ergoresearch Ltd. (2)
RDM Corp. (12)
IWG Tech. (4)
Wanted Tech. (7)
DDS Wireless International Inc. (6)
Radiant Communications (4)
Galvanic Applied Sciences Inc. (3)
Archives
August 2020
July 2020
June 2020
May 2020
April 2020
March 2020
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
Jan
26
The takeover of Intrinsyc Technologies maybe the gift that keeps on giving
Posted by: Gerry Wimmer
1/26/2020
|

TOP IDEAS: Cash and stock takeover of Intrinsyc Technologies by Lantronix (NASDAQ: LTRX) yields a 153% return and has future upside for shareholders.




Investorfile’s share price accumulation target of $1.20 for Intrinsyc Technologies Corp. was reached on March 21, 2016. For the record, we do not revise share price targets for our Investorfile Top Ideas – Small Cap Value Stocks. We have positioned our blog to be one of the first providers of a pragmatic perspective of a small cap company stock's potential worth, where there may be uncovered value that has been largely overlooked by the investment community.


In a March 2019 blog post we suggested that M&A activity could be a stock price catalyst for Intrinsyc Technologies during the year (See: Intrinsyc Technologies reports record year and looks to accelerate growth). What we did not know was that the Company itself would become the target.

On October 31st 2019, Lantronix, Inc. (NASDAQ: LTRX) announced that it had entered into a definitive arrangement agreement to acquire all of the outstanding shares of Intrinsyc Technologies Corporation. Under the terms of the arrangement agreement, Lantronix would pay Instrinsyc shareholders US$0.55 cash per share and exchange 0.2135 of a share of the common stock of Lantronix for each issued and outstanding share of Intrinsyc.

After receiving the various approvals this takeover transaction has now closed. Intrinsyc Technologies shareholders received the equivalent of about C$1.90 per share based on last week’s date for the receipt of cash and Lantronix stock.

Intrinsyc TechnologiesCorp provides solutions that span a product's development life cycle from concept to production. Intrinsyc services high–tech device makers (original equipment manufacturers – OEMs) with the ability to offer differentiated products with faster time to market. Intrinsyc designs proprietary computer modules that become the embedded systems that drive the dedicated functions for newhigh-tech products in markets including the Internet of Things (IoT).

Lantronix, Inc. describes itself as a global provider of secure data access and management solutions for Internet of things (IoT) assets. Lantronix's mission is to be the leading supplier of IoT solutions that enable companies to dramatically simplify the creation, deployment and management of IoT projects while providing secure access to data for applications and people.

Last month we had a meeting with the CEO of Lantronix, Paul Pickle. He shared with us his vision for combining the two companies, which Investorfile agrees has many merits, including "the realization of synergies equating to strong earnings growth for the benefit of shareholders,” as quoted by Pickle.

Along with synergies expected, together Intrinsyc and Lantronix become a much bigger company which is NASDAQ listed and, therefore, in a better position to attract more US institutional investors. With this, the stock can trade at a higher valuation level, which is good for its shareholders in Investorfile’s opinion.

For small cap investors who purchased and held shares of Intrinsyc Technologies since Investorfile first recommended the stock at C$0.75 (See: Intrinsyc Technologies: A high-tech turnaround play, for small cap value investors), the current gain in value by owning this stock up to time of takeover by Lantronix is about 153%.

Because a portion of the Intrinsyc shareholder proceeds was received in Lantronix stock, there is the potential for future upside beyond the aforementioned gain. We note that Lantronix has issued guidance that it expects fiscal 2020 revenue growth on the order of 25% and non-GAAP EPS growth of 35% as compared to Fiscal 2019 with the inclusion of Intrinsyc Technologies’ operations.

For the former shareholders of Intrinsyc who now own shares in Lantronix, they may have more upside to come on their original investment. It is like a gift that keeps on giving!

To date, Intrinsyc Technologies represents the eighth stock from our current list of 20 Top Ideas that has been subject to takeover or privatization at a premium.

Author’s share ownership disclosure: LTRX – Yes


Read Disclaimer:

This article is for informational purposes only. This article is based on the author's independent analysis and judgment and does not guarantee the information's accuracy or completeness. The information contained in this article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.

Investorfile.com is not engaged in an investor relations agreement with Intrinsyc Technologies Corporation or Lantronix, Inc. nor has it received any compensation from Intrinsyc Technologies Corporation or Lantronix, Inc for the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Lantronix, Inc through open market transactions and for investment purposes only.

|

FREE. Sign up for blog post alerts

Latest Tweets

Latest Blog Comments

Hi Gerry, Your philosophy is focused on principles that have been shown to produce above average results over time and your record has clearly proven that. Congratulations on a great blog and thank you for the hard work that you do in sharing and updating your ideas; it is much appreciated.