Nextgen got $11m underlying EBITDA for 2 months, in the half year, and in the earnings call they said its on track to be $33m for H2, pre synergies. So before synergies on an annualised basis its $66m. Synergies are expected to be 14m FY18 and reach $30m in FY20.
It will end up being about $96m EBITDA, for $850m (11%), which i think is reasonable considering its a long life asset, has low risk, and has the potential for sales to grow for quite some time with minimal extra costs.
It also has strategic benefits which reduces risk for the business as a whole, distinguishes us from NBN resellers, and enables us to sign national clients such as government agencies.
VOC Price at posting:
$2.50 Sentiment: Buy Disclosure: Held
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