Totally Share Discussion Threads

[sikhthetech] 01/6/2019 18:27

savage,

"sub 2% for a quality company"

Oh, so it's gone from a 'standard 5%' to sub 2% for a quality company..
Cheaper than a mortgage, eh...


So please post your source or a link where you get those figures from?...

;-)

[gowlane] 01/6/2019 16:28

1gw, I meant in the sense that having refunded the excess cash over and above what they need for the core business, they find it is there on the balance sheet when they take it over.

Vocare seems to have been problematic in various ways that is for sure, I have not looked into that issue that you mention but will check it out.

Am still mulling this over but will probably take up the open offer shares at least.

[grahamwales] 01/6/2019 15:43

In February 2017, the Company raised £18 million with the primary focus of delivering a progressive "buy and build" strategy within the UK's very fragmented healthcare market. Totally now enters 2018 with a strong net cash position of £11.1m as at 31 December 2017* which is an improvement on the previously anticipated figure of £8m that was announced on 30 November 2017.

[grahamwales] 01/6/2019 15:41

Anyone remember the increase in cash for Totally following the Vocare acquisition?

[microscope] 01/6/2019 15:34

'The total consideration for the acquisition is GBP11.5 million on a cash free AND debt free basis, with a normalised level of working capital (the "Acquisition")'

Capitals for 'AND' from me, as some of our less alert 'contributors' seem to me to have missed it :)

[1gw] 01/6/2019 15:10

Which doesn't mean it's a bad deal, just that it's not as good a deal as it seems from the £11.5m headline price, if my interpretation is correct.

So tly seems to be behaving like aggressive private equity might. It buys cash rich companies, strips out the cash (using it to pay the sellers), relies on "debt" (in this case the negative working capital) and offers shareholders a geared play on getting the operations and cashflow right.

High risk, but could bring high rewards if they succeed. In terms of whether I buy more I haven't decided yet - still getting to grips with what the enlarged company is and waiting for the share price to settle. I'd be much happier committing I think if I could see clear evidence that Greenbrook senior management were going to be in charge. I think there's some sign of Greenbrook people being put in to key operational roles, but I think there's also potential for ambiguity if not conflict at the top between Wendy and the Greenbrook CEO.

[1gw] 01/6/2019 15:01

gowlane - I don't think it is giving with one hand and taking back with the other. I think it's an adjustment to say there's more wc in the company than needed, so they're going to value it on the lower basis and pay over the excess cash. i.e. it is not that there will be more cash at completion which gets paid over, it is that they don't need all the cash that is there now.

If you look at the Vocare admissions document, the pro-forma statement showed £7.7m cash and £2.4m total net assets. In the Tly 2018 annual report, note 19 on the Vocare acquisition showed £11.8m cash and £1.8m net assets. So between pro-forma and completion cash did go up (by £4.1m), but net assets actually went down. And the "surplus cash" they paid over was £6.5m, a lot more even than the increase of cash.

So as far as I can see the Greenbrook that we can see in the acquisition announcement is being bought for (an expected) £16m, not £11.5m. For £11.5m tly get the Greenbrook that we can see in the announcement with £4.5m cash removed from it.

But do you see it differently?

[savagedstock] 01/6/2019 14:38

re post 8999

just ask anyone in the city, i am sure your mates will tell you the going rate for a decent company....sub 2% for a quality company....so the very least an honest and transparent management will do is to break it down, unless of course they have lined their pockets with LTIP....oh, they have.

[porky8] 01/6/2019 14:30

Re FIGURES ...Book Build was rather Quick .....Worried doesn't seem that way.....

[1gw] 01/6/2019 14:18

They're buying a company with £3m of total net assets with a nice conservative balance sheet (no intangibles, great cash balance, healthy net current assets). They're stripping out a [edit: lot] of cash (£13.5m [edit: less the net placing proceeds] estimated) as well as incurring fees to leave an enlarged group with:

Negative net current assets
Negative net tangible assets

But (possibly) a better shot at generating operating cash flow.

What could go wrong!

[1gw] 01/6/2019 14:12

Goodwill

£16.0m estimated goodwill vs an estimated purchase price of £16.0m.

They have got to be kidding! And that's without any fair value adjustments.

So Totally with £31m of goodwill on the balance sheet, Greenbrook with zero goodwill, but the enlarged group with an estimated £47m.

"An adjustment has been made to reflect the estimated goodwill of £15.985 million arising on the acquisition of the entire issued share capital of Greenbrook Hounslow and the Greenbrook Earl’s Court Convertible Loan Note. This is an approximation only and may differ from the goodwill in the consolidated financial statements of the Enlarged Group. In calculating goodwill, no fair value adjustments have been made as a result of the acquisition of the entire issued share capital of Greenbrook Hounslow and the Greenbrook Earl’s Court Convertible Loan Note."

[porky8] 01/6/2019 14:11

Hi Guys reading with interest ......
1) option targets 35 p first one .....
2) profit making Aquisition .....
3) Massive Footprint in London......
4) Ratings across the board Looking quite impressive ....
5) Group Revenue Solid and Growing ....
6) Turning into a mini powerhouse in our sectors ......
7) IUC contracts getting rolled out ......
8) Guaranteed income ( Economy downturn shouldn't affect us ...Probably busier)......
9) Partner of choice ( certainly in the mix )
10) Once whole group profits announced .......BooooooooooooooooooooooooM..........

[gowlane] 01/6/2019 14:05

It seems like giving it with one hand and taking it back with the other – as far as the cash balances are concerned anyway.

Totally also say that of their cash balance of £7.5m at end March, only half is required for their monthly working capital cycle, which is useful to know.

So what do you think of this overall 1gw, are you tempted to top up?

[1gw] 01/6/2019 14:05

Net current liabilities.

So once again they are allowing the sellers to strip all the cash out of the acquired business (the £9m), and then take some more out because of the "excess cash" assumption. They then have to account for the fees (the £1.3m). So the net current liability position actually gets worse:

-£4.6m Totally (net current liabilities)
+£2.8m Greenbrook (net current assets)
-£5.8m Excess cash taken out plus fees
-£7.6m Pro Forma net current liability of enlarged group

[1gw] 01/6/2019 13:53

Pesky "excess cash" provision again. How do they get away with headlining the deal as £9m cash when they fully expect to have to pay an additional £4.5m, so a total cost of £16m including the paper consideration?

"In addition, adjustment to the purchase price to reflect a normal level of working capital is expected to result in additional cash consideration payable of £4.5 million on Admission giving a total purchase price of £16.0 million. The cash adjustment including the one-off transaction costs outlined below of £1.3 million is therefore a reduction of £5.8 million for the Enlarged Group."

On checking, I see the "excess cash" was also hidden away in the notes on the Vocare admission document: "In addition, adjustment to the purchase price to reflect a normal level of working capital is expected to result in additional cash consideration payable of £6.2 million on Admission giving a total purchase price of £17.2 million."

[microscope] 01/6/2019 13:40

Placing fees include all sorts of other expenses, it's not just advisors.

[gowlane] 01/6/2019 13:24

So Miton saw this coming and sold down, no doubt putting a lot of pressure on the share price

Now they are back in and will have a 16% stake in the enlarged group.

It is hard to see them selling off from these levels after the placing so my guess is that they are here in expectation of a turnaround.

[sikhthetech] 01/6/2019 13:08

savage,

"The going rate is 5%, so £450K."


Can you please provide a link showing where the going rate for placing fees is 5%?

[football] 01/6/2019 13:06

football plays 2nd place today

[sikhthetech] 01/6/2019 13:01

All too often there's news about some fraud or dodgy dealings across different sectors/industries, regardless of whether they are profit or non-profit making...
More people should stand up and report the con artists, fraudsters and dodgy dealers..

;-)

[sikhthetech] 01/6/2019 12:59

Regarding the DM article..

I hope Conduit Global, the company behind the training courses in MK and the NHS thoroughly investigate the allegations and take the appropriate actions..

[sikhthetech] 01/6/2019 12:48

GBH must be a good acquisition if football thinks it's more important to post about NHS 111 instead of enjoying the build up to the once in a lifetime atmosphere of his favourite team, Spurs, playing in the Champion League final in Madrid...
;-)