Spring FG (ASX: SFL) has announced the acquisition of financial service organisation Financial Choice Pty Ltd for a total commitment of $4.8M. Settlement is due in mid April, 2017. This comprises $2M cash on settlement, 2.5M SFL shares to be issued at $0.20 per share ($0.5M) plus a total of $2.3M cash comprising two deferred payments: $1.3M in 6 months time plus a $1M performance based payment in 18 months time. We have revised our target price for SFL from $0.225 up to $0.28 per share recognising the risk adjusted pro forma estimated increase in eps due to this acquisition, and the longer term growth options. On the assumption the acquisition meets all expectations, the associated risk profile would reduce and our valuation would increase to 31 cps.
24 Mar 2017
ASX Micro Cap - Financial Services - Spring Financial Group - Update on Acquisition - Target Price Revision
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ASX Micro Cap - Financial Services - Spring Financial Group - Update on Acquisition - Target Price Revision
Spring FG (SFL:ASX) | 0 0 0.0% | Mkt Cap: 12.8m
- Published:
24 Mar 2017 -
Author:
Independent Investment Research Team -
Pages:
9
Spring FG (ASX: SFL) has announced the acquisition of financial service organisation Financial Choice Pty Ltd for a total commitment of $4.8M. Settlement is due in mid April, 2017. This comprises $2M cash on settlement, 2.5M SFL shares to be issued at $0.20 per share ($0.5M) plus a total of $2.3M cash comprising two deferred payments: $1.3M in 6 months time plus a $1M performance based payment in 18 months time. We have revised our target price for SFL from $0.225 up to $0.28 per share recognising the risk adjusted pro forma estimated increase in eps due to this acquisition, and the longer term growth options. On the assumption the acquisition meets all expectations, the associated risk profile would reduce and our valuation would increase to 31 cps.