Ann: Secondary trading in 5GN Ltd shares, page-58

This is my current thinking.

Current run-rate ~$6m EBITDA. Operating cashflow conversion has been near 100% so EV/EBITDA multiple is fair to use.

$10m cash in the bank with debt facility to assist. Scrip component ~30%. Gives them estimated capacity of around $12-$14m.

Assume post synergy multiple of 4x. So can acquire $3-$3.5m of EBITDA without any further funding.Company has mentioned more data centres, opportunities up/down the stack, plenty to look at.

If they buy more DC’s it would mean they get a higher multiple.

Assume acquisitions complete by 31st Dec. Run-rate by then would be $9-$10m EBITDA from internally funded acquisitions only (current cash and debt facility). Upside from organic growth (cross selling) and any other acquisitions they may make through additional capital raisings.

Multiple of 12x a $9-$10m EBITDA run-rate would be EV of ~$114m or $1.80 share price by end of 2019 using above assumptions.

That would still make it the ‘cheapest’ telco/data centre play on the ASX.If the market wanted to price it like UWL, OTW or ST1, or any of the listed DC’s then that is upside.They are all on multiples much higher than 12x.

But lets get to $1.80 first and go from there.