RE:Acquisitions or debt management? In the last 12 months the company achieved ~ $5,776k in ebitda. Net debt is ~ $ 24,949k and most financial covenants require the borrower to have debt no more than 3-4 times Ebitda. They are slightly above that number but they have significant working capital/accounts receivables that can be converted to cash in the near future. If they can reduce debt to ebitda under 3, then I'm not too worried about increased debt provided the acquisition is for an Ontario based agency. I would stay far away from Quebec until there is more clarity on the future.
Financially, I think they're in a good position. Working capital is a healthy $ 15,644k and less than long term debt but they can always refinance after the term expires. The revolving facility expires on September 2024 which is $21,609,460 at the end of Q1. Over the next 6-12 months, they can easily be in a position where they are well under the debt covenant which would allow them to pursuit another acquisition.