Vislink has just put out an announcement on RNS that it has conditionally agreed to sell the assets of Vislink Communication Systems, the Company's hardware division for $16m. The sale is expected to complete by the end of the year, subject to shareholder approval and if it does will, according to the Company leave it substantially debt free and focussed on executing its software transition strategy with Pebble Beach Systems.
I previously held Vislink until the debacle with the rightly maligned management incentive scheme. Without trawling through previous results my recollection is that Pebble Beach Systems was the jewel in the crown and that the hardware side of the business generally struggled to make any meaningful contribution to earnings. This therefore looks a very good deal given Vislink's parlous financial position and I am tempted to buy a small holding, however the track record of the existing management doesn't inspire confidence.
I would welcome the thoughts of the Stockopedia community on the above, particularly on the prospects for Vislink if the deal goes through, assuming of course that any potential opportunities are not wasted by inept management.
Like you say Pebble Beach was always regarded as the jewel in the crown. According to their interims net debt was £8.8m but they'd used their £15m RCF, so I reckon net debt was closer to £12m, if you subtract the cash on the balance sheet.
Given the sale of VCS will be $16m - than I think debt will largely be eliminated, and the remaining business would need to be valued on adj operating profits and projected overheads/central costs. The problem with Vislink (LON:VLK) is the current management, and can they be trusted. Thats a question for individual investors as based on experience a leopard doesn't change its spots and the balance sheet was a mess. For me its uninvestable given the current management at the helm.
Each to their own, and I think some bargain hunters may chase the stock higher but its not for me.
