The last acquisition was a beauty. Sits in very well with the business, and an immense number of synergies creating cost benefits and cash positive. With the money coming in now, why would you wait and miss good acquisition opportunities if they arose? I certainly agree if they were just buying for the sake of buying, but if they can get another acquisition or two (they have only touted one more at this stage) as good as the first one, then they will be way ahead in a year or two, compared to sitting on the profits.
If the company requires a placement, and the cost of acquiring a business is far exceeded by the benefits of acquiring it then as a management team you'd be negligent not to do what you have to do.
Personally I am not too sure whether the company would take on another placement (other than maybe a share issue to the an acquired company). With cashflow poruing in and forward work a year and more ahead, I think the company would potentially have no problems borrowing money to do so.
Whatever happens, sitting on the profits for 2 years will do nothing for the company and its shareprice. Growth is required, investors are expecting growth and this is obtained through acquisition and expansion.
The new management have not put a foot wrong, and I dont expect them to undermine the shareholders now after doing so much hard work to rebuild trust and confidence in the company called TOX.
Cheers
TOX Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
