First off, what a great deal by management here. Selling the...

First off, what a great deal by management here. Selling the dying PM business (I know, long time was a customer) at some 23x earnings or 3.3x book value is excellent.

On the value of the leftover business, what you're getting here is a loss making legal business, high corporate costs and a competitively irrelevant SBE accounting software (when compared to MYOB, Xero & Intuit this is hot garbage). So really you shouldn't give this a high multiple at all. In fact I'm not giving this any benefit of the doubt below and assuming just NIL Real growth

So the current market cap is $139.3m and there is $14.7m of net debt as of 31/12. Half a year worth of earnings (~$4m) have been made since then and a 2c Dividend (~$2.3m) so lets say $13m net debt currently. The deal they get $100m, pay tax on it and apply some to the debt, i'm gonna assume they just pay the rest so $13m here.

Franking credits might amount to say ~$20m here as it's some 70m premium to APS NAV and as a company they get NO CGT Discount. So just simple 70x30% = $21m, lets say $20m. They have some $2-3m in their franking acc. already. So I'm gonna assume some $22m of franking credits on their dividend (Assuming they prepay the tax) which would allow a ~$52m fully franked dividend. Given proceeds are $79m post tax and debt is $13m you're getting a $66m cash dividend ($0.58 per share). So $14m unfranked or a total franking of ~78%. sounds reasonable, you'd get a refund on some lower marginal tax brackets with that.

The other thing to take into account is the value of the deferred tax you get via. the carried forward capital losses that is inevitable on a payout of a DIVIDEND that large, that is, it is NOT a capital return. So your cost base remains as is. You can value those at whatever you want, but it's quite a big valuable tax asset to me. If you're getting some half the current price in a tax asset (let's just assume middle bracket so this is worth some $0.20 a share in carried forward losses)

So that leaves the leftover business with no net debt, and about $4.6m in NPAT for the continuing business or about $0.04 per share. Given the pretty average quality businesses here i don't think i'd pay any more than like 10x PE for this thing, 15x if i'm really stretching it (save me the tech bro arguments please) so lets go ahead and say $0.50 + 0.58 (dividend) + 0.20 (tax asset) = $1.28 is probably a FAIR price for this. If you want it cheap you can pay much less. Personally was trying to buy it from $0.90-$1.00 the date this deal was announced but as eluded to above there was NO sellers (rightfully so).