The post about THE MAN SHAKE (TMS) really triggered me! Compare...

The post about THE MAN SHAKE (TMS) really triggered me! Compare the pair (as the meerkat says):

a) TMS: https://shop.themanshake.com.au/collections/
b) THM: https://secure.healthymummy.com/product-category/pack/?_ga=2.4553139.1456605124.1646180604-1436867026.1644806217

a) and b) look like clones of one another.

TMS has apparently revenue of 400m and a controlling stake is worth 200m.

THM has a revenue of 84m and is worth 10.84m + 6.17m in HLF shares (valued at 11.96c) plus earn-out to the tune of another 5mio.* So, this is a sale price of around 22m for the acquisition of THM.

* The earn-out hurdles are set low: no growth for FY22 and a required growth of 20% for FY23:

"Additionally, the founder and CEO of THM, Rhian Allen, will receive earn-out consideration if THM achieves certain financial revenue and earnings milestones, specifically: • cash payment of $0.5m and an issue of Halo shares to the value of $2.0m where FY22 revenue is greater than $25.0m and EBITDA is greater than $5.0m; • cash payment of $0.5m and an issue of Halo shares to the value of $2.0m where FY23 revenue is greater than $30.0m and EBITDA is greater than $6.5m;"

As for Kass93, these earn-outs are designed that Ms Allen stays the course over the foreseeable future.

This will result in another 50m (my estimate from the issuing of 4m worth of new shares) shares added onto SOI. Depending on the prevailing price in the coming 18 months, we could be looking at 386m SOI (273.1m + 28.6m + 35m + 50m).

According to a survey by Grant Thornton for the agrifood-beverage businesses (gtal_2020_agribusiness-food-beverage-dealtracker.pdf) the median EV/EBITDA multiple was 10.8, trending to lower multiples continuously for the last 4 years. Businesses with a revenue between 50m and 200 had multiples of 10.3. If the prevailing downtrend continues, than a multiple of 9.5 for FY22 could be argued. This would lead to an EV of 80.75m (9.5 x 8.5) vs current MC of 28m. The SP should be trending to 21c or 22c; it is currently trading at a multiple of 3.5.

I am looking forward to some comments. Not so much, if I have missed a mill here or there, but WHY IS THE F****ING MULTIPLE SO LOW?