Thanks for the video Tsanga - it has provided some good...

Thanks for the video Tsanga - it has provided some good reflection & discussion, as well as some interesting analogies.

I'm not sure the video review was exactly flattering to VOR.

I say the players in the cyber market are all having their moments in different ways. Some went for a massive sprint and might run out of puff (AR9). Some have sprinted and might become stayers (TNT), and some have stayed on pace (VOR). Something for everyone really.

TNT is obviously viewed as growth - 4 acquisitions inside 18 months and more in the pipeline and the market seems to believe they can do it again. SGH might be a good cautionary tale in growing via acquisition. UXC gives a pointer to past performance, so buyer beware.

It's worth noting that TNT's acquisitions have all come since we acquired C10.

VOR has been more patient and gets valued more like a consultancy business and less on its growth ambitions. It still has no products to diversify income.

VOR has seen the value of TSI drop from $15m to $5m in the last two years and has been unable/unwilling to sell it to date.

Jeff claims he bought DWX on a 3.6x EBITDA multiple (after accounting for cash & working capital of DWX).

As for C10 you can't work out the multiple yet due to the variable component of the buyout. However, for the fixed component he paid 4.9x EBIT. The multiple could reduce overtime based on the success of C10.

To date I'm not sure we have seen C10 deliver as expected and Jeff still needs to squeeze more out of it. Although, in fairness, it does look like DWX has benefited from having C10 in the stable.

The video states that VOR is looking for acquisitions with a EV/EBIT of 4-6x. As we have seen in the last month it's getting harder to value some cyber businesses but it looks like one would have to pay more now than a year ago.

The ASX is littered with tales of companies buying revenue and then having their work cut out to make it work. As we have seen with some of the analogies today, be careful what you wish for and things often take a long time to play out and it can be costly.

I think VOR remains well positioned, but the next set of moves could determine if it has the heart to push on and go to another level.