5 Cash-Rich Junior Takeover Targets

Investors might be able to take advantage of the negative enterprise value arbitrage opportunity

SmallCapPower | April 26, 2016: Cash is king and a company’s ability to generate cash consistently is a sign of a well-run business. Companies can accumulate cash to acquire other companies although this, ironically, makes it a takeover target itself. All of which is good for shareholders, and this could include the stocks on our list.

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SciVacTransat AT Inc. (TSE:TRZ) – $8.17
Leisure & Recreation

Transat A.T. Inc. is a Canada-based international tour operator that operates in the holiday travel industry and markets its services primarily in the Americas and Europe. The Company’s primary business consists of developing and marketing holiday travel services in package and air-only formats. It operates as an outgoing, as well as an incoming tour operator by bundling services bought in Canada and abroad, and reselling them primarily in Canada, France, the United Kingdom and in over 10 other European countries, directly or through intermediaries. It is also a retail distributor, both online and through travel agencies, some of which it owns.

  • Market Cap: $1,790,728,391
  • Revenue (LTM): $3,624,715,000
  • Cash and ST Inv. (LFQ): $431,411,000
  • Enterprise Value: -$122,005,317

SciVacQLT Inc. (TSE:QLT) – $1.91
Biotechnology & Medical Research

QLT Inc. is a biotechnology company that is focused on the development and commercialization of ocular products. The Company’s operations consist of clinical development programs focused on its synthetic retinoid, QLT091001, for the treatment of certain age-related and inherited retinal diseases (IRD) caused by retinal pigment epithelium protein 65 (RPE65) and lecithin: retinol acyltransferase (LRAT) gene mutations.

  • Market Cap: $101,432,444
  • Revenue (LTM): $0
  • Cash and ST Inv. (LFQ): $196,270,234
  • Enterprise Value: -$78,230,199

SciVacEastern Platinum Ltd. (TSE:ELR) – $0.99
Non-Gold Precious Metals & Minerals

Eastern Platinum Limited is a Canada-based platinum group metal (PGM) company engaged in the mining, exploration and development of PGM properties located in various provinces in South Africa. Eastern Platinum has assets on both the western and eastern limbs of the Bushveld Complex (BC). The Company holds an 87.5% interest in Crocodile River Mine, which is located on the eastern portion of the western limb of the BC. It also holds a 93.4% interest in the Spitzkop PGM Project and an 87% interest in the Mareesburg Project, both located on the eastern limb of the BC.

  • Market Cap: $86,629,353
  • Revenue (LTM): $0
  • Cash and ST Inv. (LFQ): $77,960,623
  • Enterprise Value: -$22,371,186

SciVacWesternzagros Resources Ltd. (CVE:WZR) – $0.08
Oil & Gas Exploration and Production

WesternZagros Resources Ltd. is a Canada-based international oil and gas company that is focused on acquiring properties and exploring for, developing and producing crude oil and natural gas in the Kurdistan Region of Iraq. The Company, through its wholly-owned subsidiaries, holds an approximate 40% working interest in the Garmian production sharing contract (PSC) and the Kurdamir PSC.

  • Market Cap: $40,743,312
  • Revenue (LTM): $23,478,798
  • Cash and ST Inv. (LFQ): $66,973,841
  • Enterprise Value: -$20,563,474

SciVacAmericas Petrogas Inc. (CVE:BOE) – $0.23
Oil & Gas Exploration and Production

Americas Petrogas Inc. is a Canada-based international oil and gas exploration and production company. It is in the business of exploration of conventional and unconventional (shale oil, shale gas and liquids, and tight sands) oil and gas properties in Argentina; development and production of conventional oil and gas properties in Argentina, and exploration of near-surface phosphates, potash and other minerals and potential development of a fertilizer project in Peru. The Company has two operating segments: oil and gas exploration, development and production operations in Argentina and phosphates, potash brine, and other minerals exploration operations in Peru.

  • Market Cap (mm): $48,590,369
  • Revenue (LTM): $26,256,000
  • Cash and ST Inv. (LFQ): $66,697,000
  • Enterprise Value: -$11,236,477

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