Yes, Adam, my eyebrows lifted substantially when I saw the $1.00...

Yes, Adam, my eyebrows lifted substantially when I saw the $1.00 per share ($70m) needing to be conjured up by DWS as pert of the deal. I promptly sold a third of my holding on open when realising debt would approach $100m. I wonder how SMX holders feel about converting two fifth of their holdings into such an entity?

It is uncharacteristic to embark on such leverage for a company (DWS) that historically has been reluctant to use debt. When this was put to the company by an analyst in the conference, the reply was that the company had the strong support of its lender because of its track record on the earnings front, particularly in terms of their high net margins (which is probably true). Nonetheless. the CFO admitted the leverage ratio (Net Debt/EBITDA) would exceed 2 initially and come down from that level.

I suppose if DWS annual EBITDA comes in at $30m and SMX at $10m, and add in the easy picking (in the words of DWS) synergies of $5m p.a, there could be $45m EBITDA if all goes smoothly!

I must say that CEO Wallis was very blunt in his assessment of the manner in which SMX, a company he knows well,  has been mismanaged. He made a comparison with the mismanagement of DWS when he (Wallis) stood aside as CEO a few years ago - utilisation was let to slip, inefficiency crept in and client needs were not being attended to.  Wallis harped on about how lean DWS now run their operation, particularly lately since he was reinstated as CEO, and how they intend to boost utilisation at SMX and sharpen productivity. He came across as being very confident in achieving this, noting that he performed exactly this task when reinstated as CEO of DWS two years ago!

Also mentioned was that the two companies have clients in complementary industries, yet only a small overlap of clients - which allows for the often touted cross-selling opportunities.

Who knows where to from here, probably institutional holders at SMX will decide based on if they've had enough of the CEO merry-go-round and unmet promises of restructure and want to take some cash and look elsewhere.