Ann: Acquisition of Saunders & Pitt Completes, page-20

Hi Xxx12, I thought you may have disappeared on us. Absolutely agree re near term value 30-40c our NPV's etc are pretty aligned. I've adjusted mine slightly in last few days on a bit of new information.

I'm away travelling at the moment otherwise I'd do a better job of analysing this but such a good question I reckon deserves an answer even if pretty rough. Here goes but first some Notes and some things to remember. Please advise if you spot any errors etc!.

Yes there has been "dilution", but ACU has signifcantly grown / expanded in the meantime.
1. In 2020 Opteon (ACU's peer) was acquired at 9.2x EBITDA - as context pls and hopefully makes sense why this is important later on. I think some PE / Trade Major would pay 9.5-10.5 to secure ACU as the last major available for consolidation (and ACU is consolidating in it's own right at low multiples for a roll-up play)
2. In 2017 LMW (ACU) acquired MVS for $35m at 4.5x EBITDA and paid substantially in shares at 60c. This created a national firm with significant scale which is largely retained and only now (2021) really being leveraged as the property cycle and ACU's recovery accelerate. Note this is almost 2x ACU's Market Cap now. To pay for this 33m shares were issued under a rights issue.
3. In 2018 LMW (ACU) acquired Taylor Byrne for $10.3m at 4.5 x EBITDA and paid substantially via shares at 60c. This gave ACU significantly greater reach, diversification and capacity for growth which has been substantially retained. Note this is half ACU's market cap now.
4. In 2019 following the data attack, to shore up the balance sheet 68m shares were issued. ACU also raised some debt which is getting close to paid down (hence the talk of dividends next FY).
5. In 2021 Sunders and Pitt was acquired at $550k and 2.4x EBITDA with synergies >$100k identified.
6. I see EBITDA in 2023 at ~$9.5m+ now following S&P acquisition and additional data and @9.2x that's $88m market cap and 55c (minimal/no debt)
7. I see EBITDA in 2025 at ~$10.8m+ and at ~9.5x that's about a $100m market cap and 65-70c
8. When you put all above in the context of the acquisitions made just prior to the data attack, and if you believe that valuations is about capacity to deliver (and customer engagements) then it's quite feasible for ACU to reach 65-70c. With an acquisition play (for ACU) any time after 2023 we could see 80c.

For reference, MVS deal



Here's a quick go at a SOI table, changes over time, EBITDA aligned with financial year of SOI activity, share price and market cap also aligned.

And for the visual people like me