RE:RE:$400 million to be deployed over 5 years? The math is simple. I would add that acquired ITS businesses can be expected to produce EBITDA as well. Low cost financing in the 6% - 7% could be used to accelerate the acquisition program.
The most exciting aspect is that QTRH will be able to present a growth story to investors and to the street. ITS revenue (IRD currently) was $66M in 2020. At an acquisition cost of 1.5x revenue, $400M would yield $266M in incremental ITS revenue at year 5. Given an expectation that infrastructure revenue will grow at >10%, the base IRD revenue should top $100M in year 5.
Using these assumptions, the CAGR of IRD plus ITS acquisitions is ~40%. Even if acquisition mutiples are higher, there is an outstanding growth story underpinning QTRH.
In an expanded ITS importance scenario, the "old Wilan" receeds from the investment community's radar and QTRH could be re-rated to a 12x - 15x EBITDA. This could happpen when ITS revenue is two-thirds of QTRH revenue.
Are these reasonable assumptions? As a reminder, here are the numbers from the Sensor Line acquisition in January:
QTRH paid $6.0 for;
$4.0M to $5.0 revenue; and
$600K to $700K EBITDA.
To get there, QTRH needs to show investors and the market that it can execute on the ITS aggregator strategy. The SOONER...the BETTER.