good q. Based on their three most recent acquisitions, they'll be using cash + equity, with the cash component coming from the acquired business.
1. Competition Tyre & More Hallam Purchase Price = $240,000 ($200k cash + $40k equity @0.25) Revenue = $2m at EBITDA of $160k (using low range 8%) NTA = $85k and no debt
Cash is payable over 12 months - so this should be paid out of the existing tyre store. FYI - Here's a link to this store - https://bit.ly/37wTDvg
2 & 3. Elite Tyre Group (ETG) & Super Tyre Mart (STM) Purchase Price = $1.4m ($420k cash + $980k equity @60-day VWAP) Revenue = $5.5m at EBITDA of $440k (using low range 8%) NTA = $415k and no debt
Cash to be payable over 12 months.
So far it's a fairly conservative acquisition model. acquiring cash flow positive business with no debt at approx 3x ebitda, and using 12 months cash flow to cover the cash component. I do hope they keep this model and don't get tempted to take on debt.
