Nice ~3.5% addition to the company. Just to clarify in my head, seems the NPATA (after improvements I assume back end services etc) on all these acquisitions are around equivalent to 10% of revenue. I seem to recall reading somewhere that they think they can double gross margin with this model - currently they are around 60-63% EBITDA margin in 33% vs 19% standard in accounting industry. (Owners manual v2.0) This would flow down to NPATA. Is this NPATA of $200-260K to parent, meaning that given they own about 51-59% of the companies they acquire the entire practice NPATA would be around $400-520K after the transactional improvements?
How do new partners get equity in the business - do they have to buy KPG shares on market (which of course they can and I assume are encouraged), can they acquire equity from the operating business, if so is there an established way of valuing the operating company then in this case Palm Beach?
Given the contracts are for 10 years, what happens when these principals in these operating businesses want to leave, who do they sell to?
KPG Price at posting:
$5.13 Sentiment: Hold Disclosure: Held
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