Some quick valuation numbers:
Assets= $456m (after $184m goodwill write-down on China Water assets)
Liab. = $13m
Debt = $0
Cash = $199m
M Cap = $350m
From the company's website:
Heckmann Corporation (NYSE: HEK) is a holding company that was created to make investments in attractive businesses. The Company completed its first investment, the acquisition of China Water in October 2008, now operating as wholly-owned subsidiary, China Water & Drinks, Inc. On July 1, 2009, the Company completed its second investment, the purchase of a multi-modal water disposal, treatment, and pipeline transportation business in Texas, now operating as wholly-owned subsidiary, Heckmann Water Resources Corporation. The Company also makes strategic minority interest investments, such as its recent investment in Underground Solutions, Inc. (OTC: UGSI).
We have a strong balance sheet and seek additional acquisition opportunities as we build a worldwide enterprise. As of March 31, 2009, we had $300 million dollars in invested cash and cash equivalents. We intend to make additional investments and acquisitions as we find attractive long-term opportunities for our stockholders.
PE.com reported on the China Water deal:
Palm Desert entrepreneur Richard Heckmann is diving back into the water business, with an aim to consolidate the bottled water industry in Asia, much like he did in the United States to the tune of billions in revenue.
The former chief executive of Palm Desert-based US Filter said early Tuesday that his acquisition firm would acquire China Water and Drinks Inc. for about $625 million. Heckmann said China's rampant groundwater pollution, coupled with its population of 1.3 billion people, provide for an ample market. About 250 companies produce and sell bottled water in China, a hefty number that Heckmann said he hopes to consolidate.
During the conference call, Heckmann said China Water ranks fifth in overall revenue among competitors in Asia, behind Coca-Cola China....
...Heckmann's blank-check company raised $450 million in an initial public offering in November. At that time, Heckmann was coy about what companies he would be interested in buying.
"We like water, but we like everything," he said last year.
I really like this. It is another buy for less than book value ($4.02) in a company with no debt and near 50% of the share price is cash on the books. The two businesses they have bought to this point are very good businesses. China Water is a leader in its field there (yes there was a problem with some folks there "skimming" but that has been address and their shares/warrants cancelled, hey, its China) and the Greer Exploration is a very interesting business that oil & gas companies cannot do without (a better explanation of it is in the release that follows).
CEO and Chairman Richard Heckman owns just under 12% of the outstanding shares. Goldman Sachs (GS) recently (last quarter) took a 4.7m share stake in the company.
This is a play a bit like Compass Diversified Holding (CODI). Growth will come from the businesses they buy and sell.
Here is a press release updating the current investments the corp. has made:
hek1
Agreement to buy Greer Exploration:
Heck 2
Here is the China Water Presentation:
hek
Disclosure ("none" means no position):None ....Yet
