Ann: Acquires security advisory and Splunk consultancy business, page-41

"The issue with becoming a 100 Million cap company is that your stake will be worth 5 - 10% of what it is now if it's all (or 50/50) scrip..."

Not if the company continues to buy well.

ASX companies of this nature are typically valued at circa 10 x EBITDA. So using Rivium as an example,

Cost of Acquisition:

$3.25m ($1.5m cash + 17.5m new shares)
Assume the $1.5m cash component is raised as new capital at 6c = 25m new shares
So, total shares issued to acquire Rivium = 42.5m (17.5m + 25m)
Current TNT shares on issue = 160m (pre Rivium acquisition)
Total shares post Rivium acquisition = circa 200m
So dilution on current shareholders is circa 20%

Now let's see what value the acquisition brings:

Current TNT market cap = circa $10m (at 6c per share x 160m)
Rivium's Forecast 2020 EBITDA $1m
So, assume 10 x $1m = $10m in additional EV added to the TNT group
Therefore, the new market cap = circa $20m (TNT current $10m + Rivium $10m)
Total group market cap $20m /200m shares = 10c per share

Conclusion - as earnings flow through the SP effectively doubles and current shareholders improve their position by circa 100%. So, as long as the company continues to acquire well then the current shareholders will reap the benefits without being negatively impacted through dilution.

The current issue TNT has is that it is not profitable so the market isn't able to rate the company on a multiple of EBITDA. This is why I'm so bullish on the acquisition strategy, because it gets us to profitability much quicker than trying to build it out organically with all the associated risks, (including the time to market opportunity cost).

As long as TNT continues to buy well I will continue to support the stock.