We can put the "earned" portion to one side for the moment; that's not part of the initial price. You're right, the latter is A$23.3m, of which sum, the company is anticipating that 20% would be taken up in shares (i.e. to the value of A$4,660,000). If the VWAP applicable at the time were 10 cents, based on the current shares on issue (857,314,493), then our post-acquisition dilution would be 6.79% , at the 10% you suggest.
However, given the tempo of business development at Anteo to which many of us have been attuned, and that there is a period of up to three months following the AGM at which the relevant resolution would necessarily have been passed, we could see the SP doubling in that time. No guarantees, but I would not be at all surprised. If so, given that same A$4,660,000 taken up in shares, the dilution would be 3.4%.
So as you indicate, another A$18.64m needs to be raised. Some of that could be through debt (remember DIAsource has some tangible assets), some through share issues to "sophisticated investors" and/or institutions, and some through an associated SPP. All of this is pure guesswork on my part, merely "the gospel according to PeterFred", and never to which one should pin one's faith.
Dilution that results in a larger mouthful of pie, does not trouble me. It's only where the pie or pizza remains the same regular size, and you tell me that I'm to have a smaller slice than what I think I paid for, does my tummy rumble, and my mouth turn down. The DIAsource acquisition should indeed be very profitable quite in its own right, given that the company's profitability is currently running well ahead of budget (thanks to advice from ncarr).
The other point you raise is about the earned component, a form of capped but deferred profit sharing. I don't think we have to worry about this - it takes care of itself over the subsequent two years.
In addition to that summary in ncarr's report of DIAsource prospects, what also quite surprised me was that the company is actually looking down the barrel of 10*$10m deals. To speak of that now, when twelve months ago we were thinking that just one with either BBI or POC1 would be pretty good, is a little mind-bending. I'll leave others to do the maths; I did, on just a PE of 10:1, with but 50% realisation. That'd be pretty good, to rope that business in over the next twelve months.
This coming AGM is a real inflection point for Anteo. Fascinating to watch; riveting to be but a small part.
As ever, do your own research, and write your own gospels. Interesting two weeks ahead.
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