Don't be fooled, page-19

Here is another way of looking at RXP. They are a business made up from acquisitions, with $86m of intangibles being the goodwill from these acquisitions. EBITDA forecast for FY17 is $19.5m. RXP have paid between 4-5 (say average 4.5) x EBITDA for these acquisitions. So over the short life of RXP they have not managed to grow beyond what the acquisitions have brought to them ($19.5m x 4.5 = $88m). I like to invest in companies that can bring more to the table and grow organically. There is an investment case for RXP on the trading differential between the acquisition price 4.5x and what they trade on market 8x, but I don't believe this is sustainable.