Ann: Close the Loop to acquire ISP Tek Services, page-4

So they are paying US$66m for a business that in the 12 months to October 2022 year reported "normalised" NPAT of US$13.7m:



Which obviously looks very cheap.


But then, in the next breath they say there will be a US$5m earnout payment if CY23 EBITDA exceeds $12m:




Which implies NPAT for CY23 which would be a darn sight lower than the $13.7m quoted for the 12m to October 2021.   Which would make the acquisition a lot less cheap.

Unless the normalisation adjustments that were made in order to arrive at the US$13.7m number are large, in which case that US$13.7m figure is not very meaningful.

Or alternatively, the US$12m EBITDA target for the earnout is going to be exceeded by far.
In which case that figure is also not very meaningful.

So, a strange way to present things, making it nigh on impossible to work out what sort of valuation multiple they are actually paying for the business being acquired.

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