It's largely due to changes in accounting policy - see slides 16 through 18 of the presentation. $13m hit to revenue and EBIT directly from recognition of Blake sales - previously recognised by Blake as a point in time sale given 3PL was the distributor. Combined entity now recognises over the contract length which pushes a portion of that revenue to outer years - this is shown as contract liabilities on the balance sheet that unwinds through time with no additional cash outlay.
Virburnum also assumed 3PL's capitalisation policy would be applied to the group, however it was Blake's more conservative policy applied (not unexpected with them assuming executive roles, but in contrast to Virburnum's valuation).
Still working through the statements but first pass reads as though they've just kitchen-sinked the result and rebased everything. Too early to know if Viburnum were justified in agitating for the combination or not.
3PL Price at posting:
$1.25 Sentiment: Buy Disclosure: Held
