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On Monday Cohesant(COHT) announced it is being acquired by Graco(GGG) for $35M or between 9.05 and 9.55 a share. The stock shot up accordingly. However prior to the purchase a spinoff will occur of the 'junk' part of COHT. The initial valuation on this part has been set at $6.6M. This segment is known as CIPAR and consists of infrastructure rehabilitation business assets. There has been some segmentation of accounting provided for the segment historically but not any great detail, which I assume will be forthcoming in a proxy. The segment has been basically breakeven on a contribution margin basis this year and did a little better than that last quarter and the last couple years. COHT acquiired most these assets fairly recently and at a price of about $9M. The closing date for all this is suppose to be the first quarter of 2008(I assume fiscal quarter Q1 which ends Feb).

So the upside here could be about 2.5 a share or 28% in a couple months but taxes, liquidity of the spinoff and usual buyout risks need to be accounted for.


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