RE:RE:RE:Master plan news coming I feel it BudFoxx2020 wrote: Lol. I can't even. Post like this gets everyone giddy apparently. Lets just aquire a company for $1 billion dollar so we can have $1 billion in revenue. Just lol. The last thing WELL needs is another aquistion. But everything is pointing towards another aquistion to make the books look good. This is not sustainable over the long run. Just my opinion.
I'm not against acquisitions so long as they increase shareholder value.
However, WELL had $39M in cash at the end of Q3 2021. They added $70M with the convertible debenture after that. They will also add cash in Q4 (through positive cashflows), let's say of $20M. So, the total cash available would be $129M at the end of Q4. Let's say they could add some more debt, this would put the max deal at around $250M, excluding non-controlling interests. Otherwise, they will have to issue common shares, which at this price would be a red flag.
Imo, I don't think they should spend over $100M in acquisitions at the moment. It could still be accretive to shareholders, since if they pay 8x EBITDA and the business has a 20% EBITDA margin, then they would add revenues of $15M and EBITDA of $5M per quarter (+12% to revenues based on their current run-rate and +25% to EBITDA).
Still imo, talking about $1B acquisition is scarier than comforting at current share price.