Quarterhill Inc T.QTRH

$400 million to be deployed over 5 years?

[mrmoribund]

There's no greater friend of this company than I am but, I have to say, I just can't help but occasionally find a comic element in this projection to the effect that $400 million is to be deployed over 5 years.

Where on earth did they come up with this number? I guess it's good to have a target but it feels like something that was pulled out of a hat. For starters, especially if we're looking that far into the future, it's a real dice roll as to how much cash flow WiLAN is going to produce. Maybe their winners will give them $1 billion to deploy. Or maybe only $100 million.

Also, it's impossible to know what kind of acquisition opportunities might present themselves, say, three years from now. Will the revenue high end be even more pricey (relative to the revenue low end) than it is today? Maybe, and if so, are they going to make 66 $6 million (= $400 million) acquisitions?

I know I'm being a bit flippant. I understand it's just a target.

[v_guerriero]

The math is simple.  They have $150M cash.  WiLan reliably has produced $30M per year ao that is another $120M.  They can lever up IRD to 6-8XEBITDA, which fills the rest.   Apple win cash flow is on top of that.  Which as we have talked about will end up being over 200M USD when all other iPhones are included and future royalties.  German case is on top of that as

[cabbieJBJ]

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

[mrmoribund]

Guys, if only it were that simple. In 2017 Quarterhill bought IRD (April), Viziya (May), and iCOMS (July). We're coming up on the 4 year anniversary of each of them. Since then the company has continuously been focused on acquiring more (and has had the resources to do it) and yet has "deployed" a grand total of $6 million on one acquisition. I'm not trying to belittle the

[cabbieJBJ]

Mrmoribund, I don't trivialize the difficulty in making acquisitions.  That is why I continue to believe that execution over the balance of this year will be pivotal to establishing credibility that the strategy can bear fruit. It is important to recognize that the strategy has shifted twice since originally announced, each time significantly imo.  As you may recall, the

[mrmoribund]

I'm not sure if I've been shot down here but, if I have, this is one case where I'm quite okay to be shot down. The tea leaves are positive for me too. Sensor Line may have been a special case because it sounds like you had owners who wanted out for personal reasons. So it may be wishful thinking to take those metrics as the "go-forward template." Valuation metrics aside