Ann: Acquisition of LIFX and Share Placement, page-120

Earlier, I did mention that buying LIFX puts BUD effectively into the consumer sector rather than a tech stock. BUD is becoming a lighting company. An acquisition is great but you need to assess it based on the price that you pay for it e.g if you say that you had bought an ordinary house in Vaucluse people would say that's great, but it would be so if you tell them you bought it for $50m. You can buy anything but it is the value that is important.

After further assessment, I can see that the LIFX acquisition does not give BUD shareholders real value. I have benchmark LIFX against Beacon Lighting , an ASX listed company with immaculate track record (check them out purely for benchmarking) and provide you comparison across financial metrics below.

	Column 1	Column 2	Column 3	Column 4
0		LIFX	BLX	BUD
1	Annual Revenue (mil)	$ 38.48	$ 236.00
2	Gross Margin	$ 11.08	$ 155.05
3	Gross Margin%	28.8%	65.7%
4	NPAT(mil)	-$ 4.47	$   19.60
5	EBITDA (mil)	-$ 3.35	33.2
6	Net cashflow from operations	-$   12.22	$   15.54
7	Valuation (mil)	$ 70.34	$ 250.63
8	Price/Sales	1.83	1.06
9	PE		12.79
10	BUD Shrs post exercise (mil)			1,769.74
11	BUD MC post exercise @9c			$ 159.28
12	To sustain 9c sp, applying BLX PE, NPAT to achieve needs to be (mil)			$   12.46

Beacon (BLX) is trading at 12.79x earnings. At BUD's post exercise MC of $159m (assuming at 9c), it needs to earn $12.46m NPAT to trade at the same PE as BLX. So this is actually higher than my original $5-10m NPAT achievement to sustain a 9c price post exercise.