Agree, improved liquidity and increased market cap bodes well for the future. Might take two years but if they can obtain 30% EBITDA margins on $135M REV + 5% + 5% = $148M ...thats $44M EBITDA in a couple of years. Post transaction there will be 87.4 million shares on issue. IPH on 45% EBITDA margins so it's not unrealistic once you gain scale. Valuation on 10 x EBITDA comes in at $5. Timely acquistion by XIP and 8 months in the making apparently. Will trade on a higher multiple than IPH in time as market anticipates EBITDA % expansion trending to IPH. ASX 300 inclusion, more broker coverage, etc. Just have to accept it may churn for 6 months now but a $2.40 rights issue entry is better than nothing.....they did the right thing there at least , even if it was underpriced. It's a non issue though if you take up your rights. Comforting the vendor stock is being issued at $3.16. 10.5x was not cheap but was the last juicy option left in the land grab. If Griffith had 45% EBITDA margins with nowhere to go I'd be concerned, good they are sitting at 20% with much room for improvement.
XIP Price at posting:
$2.70 Sentiment: Buy Disclosure: Held
