Acquisitions profile

As TEA is quite active in term of M&A (5 acquisitions* since 1/7/23), interesting to have a look at the profile of these acquisitions :
- these companies have high net margins (between 14 % and 20 %+),
(no margin disclosure for Future Engineering),
- TEA pays a rather low price, between 2.5 and 5 X NPAT**, but before earnout.
- almost all of these acquisitions include earnout, which can be significant (usually based on EBIT or EBITDA targets on several years).

Their major acquisition has been Future Eng Group in Aug 24, which has a full year EBIT of 15.5 m$.
Quite unique way to finance it :
. 52.5 m$ upfront,
. 7 million shares of Tasmea (issued at 2.50 $, when the share price was under 2 $),
. earn out which corresponds to 37.7 % of NPAT each year between FY 25 and FY 27. Uncapped earn out.
At the time of the acquisition, TEA indicated that it had an EPS accretive impact of 21 %, but I do not know if it was including the impact of the earn out.

Interesting also to note that the total cash paid for acquisition in FY 24 (33.5 m$ vs 4.1 m$ in F Y23) corresponds to the capital increase they did for their IPO in May 24.
As the company has already paid more than 50 m$ for acquisitions in FY 25, I wonder if they could do another capital increase.
Anyway, they will probably be less aggressive in term of acquisitions as they indicated that the last 3 acquisitions corresponds to 2/3 of the earning contribution they were expecting for FY 25-27.


* GMS, Forefront Serv, Dingo Concrete Services, West Coast Link and Future Group.
** except Future Eng acquired at 4.5 x EBIT, before earn out.