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Atlas Engineered Products Ltd V.AEP

Alternate Symbol(s):  APEUF

Atlas Engineered Products Ltd. is a manufacturer of trusses, wall panels and a supplier of engineered wood products. The Company operates manufacturing and distribution facilities in British Columbia, Manitoba, and Ontario to meet the needs of residential and commercial builders. Its products include roof trusses, floor trusses, wall panels, floor joists, floor panels, project management and site assembly services, and design, engineering and permitting services. It also distributes a range of various engineered wood products for use by builders of residential and commercial wood-framed buildings. These include single-family homes, townhouses, multi-story wood-framed residential buildings, commercial buildings, and agricultural structures. Its subsidiaries include Clinton Building Components Ltd., Satellite Building Components Ltd., Atlas Building Systems Ltd., Pacer Building Components Ltd., South Central Building Systems Ltd., and Novum Building Components Ltd.


TSXV:AEP - Post by User

Comment by tkirk62on Dec 14, 2017 12:45pm
89 Views
Post# 27157236

RE:Growth from aquisitions; 50 mill in 3 years

RE:Growth from aquisitions; 50 mill in 3 years If I'm not mistaken I believe their run-rate revenue after the first two acquisitions is around $15 million before accounting for much/any growth from the three companies. Based on the observed growth rate we're probably around $20 million for 2018. 

I'm not sure what metric this $50 million is referring to (companies often mean revenue and that's what one tweet said, but I think Guy was referring to market cap) but it is definitely possible. Right now Atlas is trading at roughly 1.4x sales (assuming the conservative $15 million revenue), so getting to a $50 million market cap by Jan 1 2021 would require approximately doubling sales to $18 million. Between organic growth of roughly 25% and a couple acquisitions adding about 10% growth each time, we're looking at only needing 3 or 4 more acquisitions to hit a $50 million market cap. I'd also argue that with margins around 20% Atlas should trade at more than 1.4x p/s. 

With the focus on profitability, and what we've seen with the current acquisitions, I think a $50 million market cap on Jan 1 2021 is conservative, and from what I see Champagne doesn't seem like he wants to dilute shareholders so I'd be willing to bet this is a $1.50 stock by then. Any deserved multiple expansion just adds to the target. 
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