Ann: Appendix 4E and Annual Report-AMA.AX, page-24

"I'd be interested in what you conclude if you decide to analyse this business in a bit more detail. For me I think a lot of growth is already factored in to the SP."


Well, setting aside even the 10x EV/EBITDA multiple; take the 8x multiple, for starters.

The Market Cap of the company is $500m, there's some$20m of net cash, so EV of $480m

That, capitalised at 8x, requires EBITDA of $60m. That's double the annualised EBITDA number for JH16. (Even for a 10x multiple, that requires EBITDA of $48m, 60% higher than the current run rate.)

I'm wondering how that comes to pass?

Acquisitions, obviously, but the next logical question that arises in my mind if this is anything other than a vanilla roll-up strategy.

Because if it is, at 10x EV/EBITDA, to me it becomes a big "trust us" exercise.

And how does one satisfy oneself that these guys will maintain acquisition discipline going forward? And also, what are the integration risks, is what also exercises my mind.