At what point a target?, page-4

Hi jake,

Thanks for your post which raises some very valid points and which is very good timing considering what happened on Friday!

I can tell you that over here in Europe, EDE, TAS and EdenCrete are already on some Institutional Investors/Banks watch lists and a few M&A radars as well.

In fact I was asked to attend several meetings over the last 6 months where I was asked for my opinion about the chances of success of EdenCrete as a product and a company as well as about information on EDE & TAS. I am sure that I don't need to tell you what I said about EdenCrete. At these meetings I provided details about EDE, TAS and EdenCrete in the form of the most important ASX announcements as well as providing the EdenCrete home page, which is a fountain of information. Indeed I continue to send via E-Mail the most important ASX announcements to these Institutional Investors/Banks as well as the M&A companies. On Friday I also had a lunch with a Swiss banker who wanted to hear the very latest, particularly in view of Friday's GDOT sales announcement, which was a major milestone and which subsequently ushers in a new phase.

Currently the consensus here in Europe (primarily London, Frankfurt, Paris, Luxembourg and Zurich) is that EdenCrete looks extremely promising, however, every single Institutional Investor/Bank indicated that they would first like to see at least 6 months of sales/cash flow etc. before moving EdenCrete off their watch list. In fact they are all bound by internal regulations to do so. Once, however, EdenCrete has a full 6 months of sales under their belt and have demonstrated their success, these Institutional Investors/Banks will consider investing themselves and recommending EDE and/or TAS to their customers as vehicles in which to profit from the success of EdenCrete.

With regard to M&A, the situation, although they also have EdenCrete on their watch lists and have already done some very basic research and number crunching, until they see at least 6 months of sales/cash flow they will not be taking any action. Having said this, they of course already have made a short list of their clients that could be interested in taking over EDE and/or TAS when the time comes. Waiting is of course fraught with danger, as the longer you wait the higher the takeover price will be. Nevertheless, no M&A company will want to jump in too early and risk falling on their arse. Therefore I cannot imagine any client of an M&A company launching a takeover this year at all.

With regard to valuations, based on the huge size of the concrete/admixture market and thus the potential EdenCrete has for success, it was agreed that any client would have to probably dig pretty deep into their pockets. The range of valuations that I heard, although of course of a very theoretical nature, were from A$1 to A$1.50 (based on US$120 million of sales in 12-24 months time). Of course everyone knows that in 5 years time, if everything goes to plan according to the production timetable in the Investor Presentations, the TO price will be far higher.

Let me make it very clear that I personally would prefer that EDE/TAS and EdenCrete go it alone and wait at least 5 years before even considering any sort of takeover amount. My hunch is also that this is also what the EDE/TAS/EdenCrete plan is.

Hope this helps a bit?

Best regards!

MB

Please note: This post is my own personal opinion and not a recommendation to buy or sell. Readers must do their own research before undertaking any investment decision. The Information herein is based on factual information obtained personally by me, or given personally to me by totally reliable sources.