ACF Always Count on Formwork, page-55

I have been reading through all the half year reports again. Management clearly looking for another acquisition to broaden geographic spread.


Debt to EBITDA will be at 0.86 if they achieve mid range guidance. This gives them room to take on more debt while keeping debt/EBITDA below 1.1.

Here is how I think they could fund an acquisition:

• $4m cash
• $10m loan (They have plenty of headroom with their banking partner)
• $10m cap raise at $1.15 (5% discount).

Cap raise at this price would only add 8.7m shares to the register.

This gives them an acquisition of around $24m. Assuming consideration will be around 5 x EBITDA, this be an additional $4.8m EBITDA.

And a 30% EBITDA margin will mean about $16m additional annual revenue.

This isn't a massive acquisition but will help to achieve geographical spread.