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An Acquisition Move Buoyed A-Mark (AMRK) Stock After-Hours

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During Tuesday’s extended trading session, A-Mark Precious Metals, Inc. (NASDAQ: AMRK) saw a notable increase in the value of its shares, rising by 6.23% to reach $28.80. This increase came after the regular session’s 1.69% gain, which ended at $27.11. The statement of a strategic acquisition maneuver preceded the increasing trend of AMRK shares.

A-Mark (AMRK) has entered into a non-binding letter of intent (LOI) with AMS Holding, LLC (AMS), a well-known platform for collectors that specializes in the promotion and transactions of both contemporary and historic coins. The three principal transactions described in this letter of intent include the planned purchase of LPM Group Limited (LPM), a significant participant in the Asian precious metals market.

It is expected that both deals would close simultaneously in February 2024, assuming normal closing conditions and all required approvals, including those from A-Mark’s lenders under its Trading Credit Facility. This is contingent upon the completion of definitive agreements. A-Mark made a calculated strategic decision to increase its global presence, especially in the Asian market, by acquiring LPM.

The moment was considered favorable to incorporate LPM into AMRK’s portfolio, thereby broadening its worldwide reach, given that the company already has supplier agreements in place with AMS. By utilizing A-Mark’s resources, LPM should be able to provide a greater range of products to consumers and increase its capacity to get larger purchase orders.

By using its e-commerce expertise, A-Mark seeks to expand LPM’s direct-to-consumer business and offer a greater range of products to its global clientele, along with additional services like shipping and storage. The LOI stipulates that A-Mark will give AMS $41.5 million in total consideration for a 100% ownership position in LPM.

This amount will consist of $37.5 million in cash and $4.0 million in A-Mark ordinary stock. Future cash payments could be paid in addition to this, based on AMS’s 2024 and 2026 EBITDA targets. Furthermore, as per the terms of the LOI, Pinehurst Coin Exchange, Inc., an affiliate of A-Mark, would purchase all of ModernCoinMart’s (MCM) assets from AMS for $5.5 million.

This will provide Pinehurst Coin Exchange, Inc. access to $3.0 million worth of merchandise in addition to MCM’s customer base and brand assets. In addition, AMS will receive a common equity stake through a proposed joint venture between A-Mark, Pinehurst, and Stack’s Bowers Numismatics, LLC. As part of the investment agreement, A-Mark CEO Greg Roberts will join the AMS board of directors.

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