ACF 1.35% $1.10 acrow limited

ACF Always Count on Formwork, page-55

  1. 277 Posts.
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    I have been reading through all the half year reports again. Management clearly looking for another acquisition to broaden geographic spread.
    https://hotcopper.com.au/data/attachments/6000/6000067-115a8baa52d7e4b602a5ebdbccffd571.jpg

    Debt to EBITDA will be at 0.86 if they achieve mid range guidance. This gives them room to take on more debt while keeping debt/EBITDA below 1.1.

    Here is how I think they could fund an acquisition:
    • $4m cash
    • $10m loan (They have plenty of headroom with their banking partner)
    • $10m cap raise at $1.15 (5% discount).

    Cap raise at this price would only add 8.7m shares to the register.

    This gives them an acquisition of around $24m. Assuming consideration will be around 5 x EBITDA, this be an additional $4.8m EBITDA.

    And a 30% EBITDA margin will mean about $16m additional annual revenue.

    This isn't a massive acquisition but will help to achieve geographical spread.
 
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