Deal Of the Century, page-3

This deal is outstanding for buddy. How did they manage this? Dave is back to being a genius. This must have been the primary focus over the last quarter or so. I can forgive a dip in the quarter revenue given the reason outlined around Airstream’s new contract and then all of the work that would have been required to accomplish this acquisition.  LIFX must see incredible potential in Buddy. Can’t wait for the webinar. The price is so cheap. Its 1.57 times 2018 revenues and if they grow as they expect (70-100%), then revenues will be close to $80m and so the price is 0.9-0.7 times revenues. Live tile paid 6 times revenue yesterday for an acquisition. $48m for $8m in rev.

LIFX are Number 2 in the world, behind Philips Hue, who spend $200musd a year on advertising!! LIFX are projecting to be profitable in 2019. That’s brilliant and Dave confirmed Ohms/ cloud will break even on its own.

So clever for LIFX to sit on the coattails of the  #1 (31B euro Philips) and get dragged along in this new and exciting space. Looks like the LIFX founders believe the journey has only just begun and now they have access to the capital markets they are expecting sales to rocket. Only thing stopping LIFX growing faster than 100 percentage was capital constraints and supply of stock!!!  Combining with Buddy has fixed that.

The synergies are incredible with bud ohm. Just what OHM needed. Adds the ability to control lighting whilst monitoring it. Can be manually controlled or automated. The amount of sensors in these lights is mind blowing.

LIFX and ohm are a perfect match with both help each other so much that 1+1=5. LIFX move into commercial, industrial and government with Buddy’s help and buddy moving into residential. Imagine a Saas business for residential monitoring of energy.

These founders have escrowed their stock UNTIL revenues hit $100m-$250m…Dave is matching them with his performance shares. . That’s a massive vote of confidence that they will get there from the founders and Dave.

Note, that’s not BUD total revenue that just their contribution to the revenues. These two new founders and their team joining buddy management and team strengthens this company 10 fold IMHO.

 

As always DYOR and HOLDTIGHT.