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Shell Summary for Feb. 21, 2020

2020-02-21 20:41 ET - Market Summary

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by Stockwatch Business Reporter

The TSX Venture Exchange closed up 1.37 points to 582.55 Friday, ending the week up 12.06 points. Allan Hartley's shell graduate, Bay Talent Group Inc. (HIRE), gained 0.5 cent to close at 37 cents on 317,500 shares, after announcing a plan to acquire David Keys's NEX shell, RSI International Systems Inc. (RSY: $0.135). This shell had $5.31-million cash on Sept. 30, 2019, and that money is what Bay Talent is after. RSI today slipped 0.5 cent to 13.5 cents on 12,500 shares, following the announcement.

The acquisition terms are not yet available, but the shell is being valued at $7-million, which works out to 19 cents a share. As for Bay Talent, it is being valued between 32 and 35 cents a share, which works out to a range of $15.38-million to $16.83-million.

Bay Talent is in the business of acquiring recruitment firms and information technology consulting firms. So far, it has acquired none of the latter but two of the former: PTC Accounting and Finance Inc., which was formed in 2003, and Provision IT Resources Ltd., which was formed in 2010. These are both Toronto companies. Bay Talent boasts that its two wholly owned subsidiaries provide recruitment services for accounting, finance, IT, office administration and human resource positions, to customers including "large" but unnamed financial firms, insurance firms, pension fund managers and government agencies. Despite its client roster, Bay Talent is not profitable. In the nine months to Sept. 30, 2019, it lost $2.76-million on revenue of $9-million. At the end of that period, although it had no long-term debt, it had a working capital deficit of $1.07-million. Its current liabilities included a $1.43-million bank debt.

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