Premier Health of America Inc V.PHA

The acquisition - thoughts?

[colourama]

Haven't read in detail, but looks good!

Stripping out the Covid-related numbers, we are getting

About $24 million in revenue
About $3.6 million in EBITDA
About $1.6 million in net income

for about $12 million purchase price (at the average)

Very nice!

[Torontojay]

Great acquisition!  I like how the company always breaks down their acquisition  with relevant numbers so we can eliminate the guess work.  What if COVID lasts another couple years? The acquisition would be paid off in just over 2 years and we get the rest of the years for free. 

[colourama]

Now that there are concrete numbers, if I play with the valuations (taking some of your numbers from earlier) Say 4x1.5  + 3.4 = 9.4 EBITDA run rate as a very conservative estimate Put a very conservative multiple of 10*9.4 = $94 million Debt = $11.2 million (existing) + $14.5 million (new, assuming full earnout) = $25.7 million Cash = $4.4 million Then marketcap = ($94 - $25.7 + $4.4) =

[Torontojay]

Nice work colourama.  Now we have to ask the question: How much of a tailwind has COVID been for the business in the last couple of years? Given that the business they recently acquired had a slightly higher ebitda of $6.4m of which almost half of it was due to COVID ($3m)  As long as they continue to acquire companies at dirt cheap multiples we are going to make some serious money

[colourama]

Torontojay, this is a good question - how much of their present financials is a tailwind from Covid? If we just consider the three previous acquisitions: Code Bleu was acquired in 2020, but their 2019 pre-Covid metrics in the news release at the time had $3.9 million in EBITDA. Solutions Nursing had EBITDA of $0.6 million - lets say 50% Covid related, so $0.3 million EBITDA. So adding these