Ann: Investor Presentation, page-2

For me, the killer chart showing what is driving the acquisition of Invivo by Microba is in the offer document but is not in this presentation deck:



"It" would have been clearer if the Microba revenue was on the base but I suspect that it is for that very reason that they have Invivo revenue on the base. Even so, the chart shows that Microba has not seen the organic revenue growth that they had predicted for their testing services unit and which would be expected were the testing services that Microba currently offer had caught a popular wave.

Typically, with disruptive products or technology they show an "S Curve" growth profile, starting off slowly, then moving into an exponential growth phase before steadying out. Microba keep saying that that S Curve phase is about to happen for them but to date it has not arrived. So, in my view, Microba has taken the alternate path of buying revenue growth as a way of obtaining critical mass and momentum. That tactic may be okay, but only as long as the additional business is cash flow positive. There are plenty of examples of companies going after revenue growth through acquisition but many of them gain quantity but lose quality.

Microba has the attraction of not only being a service provider but also being a R&D outfit. Its success of its R&D programs seem distinct to how many people want to track their microbiomes. I've learnt the hard way not to rely on R&D ever delivering investment success so I would much prefer to see the combined Microba Invivo meet with short-term success. But at least the R&D is there as a backstop.