Microcap air purifier Purifloh sold a portion of itself to a US billionaire at almost five times its share price which is stated as one of the most unexpected stock market investments of the year 2018. For 4 million Purifloh shares at $2.40 a pop, American businessman Bill Parfet this week paid $9.6 million. The stock of Purifloh (ASX: PO3) was attractive at 50c at the start of the week.
Air purification, water sanitation and medical sterilization are three main fields which Purifloh has technology that it is planning to roll out. A mailbox-sized air purifier that kills airborne diseases like Anthrax and eliminates tobacco smoke, the company is also known for developing these.
Pushing the price up to $2.17 a 334 percent jump, open-mouthed investors gave away more than $700,000 at the stock on Wednesday. For a total of 5.3m shares or about 17 per cent of the company, Mr. Parfet bought another 1.3 million shares in an off-market transfer from Purifloh’s second biggest shareholder, in addition to the placement. He will also join the Purifloh board.
To an independent party not related to the company’s technology partner Purifloh will need to pay a 3 percent introductory fee, Somnio, for the introduction to Mr. Parfet of the $9.6m in funds received however. Mr. Parfet told ASX investors that he had been interested in its technology for some time and Somnio, a research and innovation company, is based in Detroit, Michigan.
He said, ‘due diligence on Somnio has been conducted and on its range of technologies for some time, and they are impressed with the disruptive nature of the FRG technology platform.’ To execute on its potential was logical, an investment into Purifloh, that the technology has global impact only adds to our attention and has been developed in Michigan.
Several potential reasons to ‘Why pay a 380 percent premium?’ Beer & Co. valued the stock at $5.10, a 920 percent premium to Tuesday’s closing price of 50c in a research report. With just 27.29 million, the company also doesn’t have a great deal of shares on issue, in fact.
Dilato Holdings, the majority shareholder, of those on issue, the stock is quite tightly held prior to this investment-controlled 67 percent of the stock. With a long corporate history, Mr. Parfet, 71, is said to be a billionaire. He worked for a pharmaceutical company called Upjohn, for 30 years that was founded by his great-grandfather.
Before being acquired by big pharma giant Pfizer in 2003, Upjohn later became Pharmacia & Upjohn, and had ties with Monsanto. The $9.6 million cash injection will help commercialize water purification technology and Purifloh’s Free Radical Generator (FRG) air.
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