January 2016's OTC Graduates' M&A Activity.
Three issuers graduated from the OTC Markets in January 2016. They all jumped to the NASDAQ and they all completed at least one acquisition prior to uplisting. Acquisitions played a pivotal role in all three issuers' ability to uplist. Below are short summaries of each graduates' business and M&A record.
(1) Workhorse Group Inc. "manufactures electric drive systems for medium-duty...commercial truck platforms" and is also developing drone delivery systems.
On January 7, 2016 "WKHS" graduated from the OTCQB to the NASDAQ Capital Market.
The operating company of WKHS went public via reverse merger in December of 2009 and "devoted the majority of its resources to the development of an all-electric drive system". From the time of the reverse merger until March of 2013, WKHS operated with little financial success.
In March 2013, WKHS "acquired Workhorse and the Workhorse Assets including the Workhorse ® brand, logo, intellectual property, patents and assembly plant in Union City, Indiana." That acquisition took WKHS from a struggling micro-cap with exciting technology, and assets of approx. $200k, to a solid business with approx. $5MM in assets. The assets of the business remained at about $5MM until December of 2015 when WKHS raised $13 million and quickly uplisted to the NASDAQ.
(2) Self Storage Group, Inc. is a "self-administered and self-managed real estate investment trust ("REIT") focused on the ownership, operation, acquisition, development and redevelopment of self storage facilities in the United States".
On January 19, 2016 "SELF" graduated from the OTCQB to the NASDAQ Capital Market.
As a small REIT, publicly traded on the OTC Markets, SELF completed 7 acquisitions since 2012.
(3) SPI Energy Co., Ltd. is a solar company that "focuses on the downstream PV market including the development, financing, installation, operation and sale of utility-scale and residential solar power projects in China, Japan, Europe and North America." SPI Energy Co. also operates "an innovative online energy e-commerce and investment platform" and "a B2B e-commerce platform offering a range of PV products for both upstream and downstream suppliers and customers".
On January 19, 2016 "SPI" graduated from the OTC to the NASDAQ Global Select Market.
In 2015, SPI closed four acquisitions and added nearly one dozen additional targets to their acquisition pipeline.
While acquisitions played a very large role in the growth strategy of SELF and SPI, even WKHS completed one (or two if you include the reverse merger) transformational acquisition prior to joining the NASDAQ.
Historically, many- but not all- OTC graduates have grow through acquisitions. So far, 3 of 3 2016 OTC graduates grew through acquisitions. If you run a micro-cap public company, will you be the next OTC issuer to uplist after growing through acquisitions?
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