@jezyhIt’s a recent analogous sale / peer comparison so...

@jezyh

It’s a recent analogous sale / peer comparison so absolutely Snowtown 2 should be considered when evaluating this bid. It may have be at the high end but this bid is the opposite end of the spectrum.

IFN is on track to hit ~$180m EBITDA in FY20 (approx +10% yoy) and at current growth rates would be expecting $200m+ easy in FY21. They have net debt of ~ $450m (IH FY20 $600m debt, $100m cash but expect this will have come down given 2H cashflow skew and COVID-19 capex deferral etc). That means we are talking about a forward EV multiple of approximately 6x ($200m/$1.2bn EV)

Snowtown 2 was acquired by Palisade for a very similar EV but was generating ~$68m in EBITDA at the time of acquisition (according to ASX filings) implying a transaction multiple of c. 16x. I accept your point about Snowtown being an exceptional asset and therefore deserving of an exceptional multiple, but this bid is outrageously low.

If you apply a mid range 10x EV/EBITDA multiple then we are talking about a share price close to $1.50.

Note all figures above are rough / back of the envelope.

Cheers