Q: Hi, Any comments on Lumine Group NR about setting up a $310 mln LOC ? Good ?
May be, it demonstrates LMN Management's commitment for a more expedited growth path than its parent.
Constellation Software, if I remember correctly, set up their first Bank LOC, several years down the road after going public ( may be I'm wrong ), because Mr Leonard, for a long time, had not been a fan of debt, until the company raised the hurdle rate and made a shift towards looking for larger acquisitions.
Thank You
https://www.luminegroup.com/lumine-group-announces-completion-of-us310m-debt-facility
May be, it demonstrates LMN Management's commitment for a more expedited growth path than its parent.
Constellation Software, if I remember correctly, set up their first Bank LOC, several years down the road after going public ( may be I'm wrong ), because Mr Leonard, for a long time, had not been a fan of debt, until the company raised the hurdle rate and made a shift towards looking for larger acquisitions.
Thank You
https://www.luminegroup.com/lumine-group-announces-completion-of-us310m-debt-facility
5i Research Answer:
As of the most recent quarter, LMN only has a net debt of around $26M, and this is a very low leverage level for a business that is expected to generate more than $300M in EBITDA this year. Given the predictability of LMN’s business, LMN is a very under-capitalized entity. The CSU’s group has mostly been very conservative when it comes to debt financing.We think slightly putting more debt on the balance sheet to do more acquisitions totally make sense. We are okay and comfortable with the move. It is a low cost of capital and will allow the company extra flexibility to move quickly on deals if needed.