So the business has been operating nearly 100 years, with 2700+ accounts (many longstanding customers) - unlikely to go bust any time soon.
Offer will see 11.6m shares at $1.46 each. $17m raise, for $76.8m market cap (+ net debt of $6.4m). No selldown from current holders (22.1% free float) and there will be 52.6m shares after listing.
Moderate yield of 5.4%. Pretty solid cash flow but morbid forecast for revenue growth in FY17 and FY18. Profits only look like stepping up in FY18. Over 75% of the funds to be used to reduce debt! ($12.8m)
Not a big fan of growth by acquisition (roll-up strategy), seen it go wrong enough for my liking. Company leases all its outlets/distribution centres, so doesn't own the physical assets from which it sells its products - three due for expiry/renewal within 9-10 months. EV is pretty significant, and already outlined my competitor concerns - enough to make me look elsewhere to park my funds.
Pretty convoluted escrow arrangements too - not sure I've seen something exactly like this before.
