Boat fund update: "Only days after releasing our June 2014...

Boat fund update:

"Only days after releasing our June 2014 quarterly report where we outlined our rationale for investing in EBT, the company announced a placement to acquire one of their major competitors in the NSW market, Flexi-NET for $4.8 million.

We believe the acquisition makes a whole lot of strategic sense for EBT. Flexi-NET gaming systems provide ticket-in-ticket-out for gaming machines in gaming venues across NSW. By acquiring Flexi-NET, EBT can offer its latest gaming technologies to Flexi-NET’s current customer base and hence extract significant revenue and cost synergies from the acquisition over time.

According to EBT, the acquisition will add on a pro forma basis for FY2014 alone, $3.1 million in recurring revenue, $1.4 million in EBITDA and will be over 21% earnings per share accretive.
We decided to participate in the placement and to add to our current holding. As of the date of this report, EBT is still in our top 3 holdings within the Fund Portfolio. We believe EBT MD, Tony Toohey, is building in EBT - one of the most strategically attractive gaming industry businesses in Australia. We wouldn’t be surprised to see one day, one of the local or international gaming companies or gaming machine manufacturers, make a takeover offer for EBT.

Until that day (if it ever occurs), we are happy shareholders as Tony Toohey and the management team continue to build a business with a steady and growing stream of recurring revenues."