Initially would've thought the same thing. Company has said numerous times didn't want to use script etc.31.8m at say 90c is ~35m new shares. But then they need 31.8m more. If you say the 2H22 is net 0 profit (used cash to buy rest of taxbanter) then you've got net cash of 3.6m and an unused facility of 10m. So we need ~18.2m raised from equity. Let's say another ~20m shares. Total would be 10m net debt less the 8m they are acquiring and then roughly 92.6m shares out.
But then you compare this to what they are getting. Centrepoint has ~50m in tax losses accumulated from the grandfathering claims over the years. This is 15m in deferred tax assets which basically will cover them for atleast 4-5 years of profits in my mind. Annualised EBITDA including Clearview is ">8m" and it's a capital light model by design. So really pretty much all of that goes to the balance sheet as cash every year.
Diverger has no such losses to utilise so let's annualise the ebita of 3m to 6m and apply a 30% rate and you get 4.8m free cash.
Combined free cash is ~12-13m basically. At 90c and 92.6m shares out the market cap is 83m. Add the 2m net debt and you're buying the combined business for 85m here. For 12-13m of free cash that's still only a ~7x multiple of free cash flow. FAR from demanding.
DVR Price at posting:
87.5¢ Sentiment: Buy Disclosure: Held
