acquiring sterling, page-15

I have held gem since it was at 70cents (scary days given limited EPS arbitrage opportunity) sold a bit along the way.

Anyway, I don't mind that they have paid 5.8x for 91 centres - I believe Sterling was only ~77 centres and they (sterling management) paid or offered an average of 6x EBIT for these centres prior to the expected listing. Which mean GEM has also picked up another 14 centres from other operators. If you back solve for that it works out to be ~4x EBIT for those remaining 14 centres. So they are still acquiring at 4x ex Sterling. Good.

Is 6x for Sterling too much? not necessarily....apparently they are more premium ie higher margin than GEM would warrant a higher multiple...also it has no doubt saved GEM management quite a bit of leg work negotiating sales contracts which surely has a monetary value attached.

Also the fact they are raising capital at $4.60 after the strong s/p run in the last week is very positive indication

All in all as a shareholder im happy enough with the latest acquisition.....balance sheet will still be health post capital raising and acquisitions are growing at an accelerating rate....no broker has this in their numbers...

Im betting the share price will rise when in comes out of the trading halt.