Though it is a clean up activity, I feel this is a very good deal in terms of valuation
InteractDX has 45 crores revenue and 15 crores EBITDA…So it is purchased at around 9X … Generally services industry is valued at 7-10X
Considering that it is a established Product and with better margins (33.33% vs 22%) a 9X valuation is a good deal.
Few other points which I could recall
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Last 3 years growth was around 8-10%. This year again it could be same or flatish. But in long run Aurionpro will be able to take this to their similar growth rate, which is around 25-30% range
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Future R&D expenses will be in the similar lines of Aurionpro (I guess around 7-10%). Accounting will be same as Aurionpro and they will be expensing it out and not capitalizing it
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They will be able to sell this in International market, where margins will be even better than this
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