Seems to be the first time that GXL has gone into halt for an acquisition, so it must be fairly material - and probably requiring some equity funding.
Anyway, thought while waiting, would review the progress GXL has made since listing and success of previous acquisitions.
GXL listed June 2007 with 31 practices. Shares were issued at $1 per share, but quickly shot to $2.15, only to descend from there. Market cap at listing (based on $1) was 21.5m.
At HY 2008 (first useful report for comparison) they reported $17.1m revenue and $1.35m in NPAT.
So 2.5 years after listing and 2 yrs after the first result, the number of practices has increased by nearly 50% to 46, the revenue by 55% to $26.5m and the HY NPAT by 52% to $2.05m. However, the market cap is actually lower (at $20.3m). Also, despite the large increase in practices, the number of shares on issue has only increased by 12.5% to 24.2m. Even though this is due to use of debt, the increase in debt from $8.5m (at listing) to $16.0m, has only increased EV by 25%.
All this suggests that they have done a good job with acquisitions - 12.5% dilution for 50% profit increase over 2 years is a good record for a roll-up. Of course having a lower share price makes any equity funded acquisitions more dilutory, so it might be a hard task to repeat.
GXL Price at posting:
84.0¢ Sentiment: Buy Disclosure: Held
