- SGH paid $1.3B for a business that was losing money and was cash flow negative.
- It needed more money put in to get to the point where it now has positive earnings
- the medium to longer term EBIT contribution may only be $60M to $80M per year based on the 2H 2016 figures
So how is that not overpaying ?
If SGH paid 5 times medium term EBIT - say maybe $350M less the amount needed to fix it up - you could justify that.
As Denbo pointed out above - what they actually bought wasn't what they thought they were buying. At the end of the day management and the board are responsible for that, and they are still there !
SGH Price at posting:
26.5¢ Sentiment: None Disclosure: Not Held
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