I think this is a so-so acquisition; I far prefer the commercial and SME space, as opposed to residential, home & contents, which is what they've bought.
Besides, they certainly aren't getting it for a steal.
That all said, it is a Queensland-facing business they are buying and I'm bullish on the Queensland economy over the next 7 or 8 years as it gears up for the Olympics.
So I think the execution risk in relation to this purchase is low from a macroeconomic point of view.
Therefore, despite my having an oversized position in SDF (and an even larger position SDF's peer, AUB), I will once again be participating in a capital raising by the company.
Doing so in the past has served me well, and I don't see anything in this deal to suggest that this time will be any different.
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SDF Price at posting:
$5.70 Sentiment: None Disclosure: Held
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