Telerhythmics historical revenues for 9 months CY18 were US$3.174m (if we extrapolate to 12 months we end up at c.$4.2m).
Therefore: acquisition price of $2m / $4.2m is c.0.5x revenue multiple (cheap!).
The details we are missing are the operational efficiency of Telerhythmics as a stand-alone business, which we don't really care about since we will plug their existing stand-alone business and distribution network (~100 commercial payor agreements, additional 30-35m+ covered lives) into the existing GMV infrastructure.
By taking their revenue and additional market reach through insurance coverage, GMV should be able to (as the announcement states) capture significant synergies to further build its presence in the Southeast and Southwest territories.
This is obviously a strategic and opportunistic acquisition and the price paid looks very cheap (great for us GMV shareholders). However, it is only the total upfront consideration - there may be future royalty payments etc....but it really doesn't matter at this point in time - Dr Geva is smart enough to negotiate good terms!
Market looks to see this as a positive.
Forever holding (well until I can retire from GMV that is) - have a great day all.
AIMO
