There are plenty of stocks that are in the news morning and one of those is the Smart Employee Benefits Inc (OTCMKTS:SEBFF) (TSXV: SEB) stock. The company, which is involved in full-service cloud-based information technology services for the benefit processing solutions space, made a significant announcement this morning.
Smart Employee Benefits announced this morning that it had been successful in selling off 8.04% of its investment in the business consulting company Paradigm. It was a partial sale. Following the sale, Smart Employee Benefits is going to continue to hold a 16% stake in Paradigm. It was a significant announcement from the company and it is going to be interesting to see if it leads to any action in the stock.
In this situation, it may be a good move for investors to perhaps consider taking a look at the details of the deal in order to get a better idea of the deal. Smart Employee Benefits announced that in order to complete the transaction it deposited a total of 804000 Class A limited partnership Paradigm Consulting Group units for $1.55 each.
On the other hand, the company also deposited as many as 1000 Class A shares in Paradigm for $0.01 a share. Thereby, the total proceeds from the sale came up to be $928630.
The proceeds from the sale were paid entirely in cash and the money is going to be used by Smart Employee Benefits for its own working capital needs. It was back in 2015 that Smart Employee Benefits had completed the acquisition of Paradigm Consulting Group and at that time, it was regarded as a strategic move.
Following this sale, it may be interesting to see if the fresh infusion of capital into Smart Employee Benefits leads to any short to medium-term boost for the company or not.
Key Quote
States John McKimm, SEB’s President and CEO, “Paradigm is a strong, growing business. It is performing well and has excellent growth opportunities. While SEB believes strongly in the future of Paradigm, it no longer has the strategic fit it did when SEB first acquired it in 2015. The redemption of the LP Units and GP Shares provides room for Paradigm to increase its employee ownership over time without increasing the number of outstanding securities beyond the original 10,000,000 LP Units and 10,000 GP Shares.”
