IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a> aims to acquire <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a> through share purchase agreements (SPA), a share subscription agreement (SSA) and a public tender offer at KRW30,000.</li>
<li>The shares are trading wide to terms due to key risks - regulatory approvals and the minimum acceptance condition (Medtronic owns 53.02% of the post-SSA outstanding shares).</li>
<li>The regulatory approvals should be forthcoming due to minimum competition issues. The minimum acceptance condition requires a minority acceptance rate of 15.7%, which is achievable due to an attractive offer.</li>
</ul>



Medtronic Plc (MDT US) aims to acquire Eoflow (294090 KS) through share purchase agreements (SPA), a share subscription agreement (SSA) and a public tender offer at KRW30,000.
The shares are trading wide to terms due to key risks - regulatory approvals and the minimum acceptance condition (Medtronic owns 53.02% of the post-SSA outstanding shares).
The regulatory approvals should be forthcoming due to minimum competition issues. The minimum acceptance condition requires a minority acceptance rate of 15.7%, which is achievable due to an attractive offer.


EOFLOW/Medtronic Tender: Risk/Reward Profile

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Back on the 25 May, healthcare company <strong><a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a></strong> <a href="https://news.medtronic.com/2023-05-25-Medtronic-to-acquire-wearable-insulin-patch-maker-EOFlow" target="_blank" rel="noopener">announced</a> it had entered into a set of definitive agreements to acquire <strong><a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">EOFlow (294090 KS)</a></strong>.</li>
<li>Via a three-step process - SPAs, issuance of new shares, and a Tender Offer - Medtronic will seek majority control, together with a view to delisting EOFlow.</li>
<li>Completion is expected in 4Q23. Regulatory approvals -  domestic and foreign - form part of the conditions. Trading wide to terms. </li>
</ul>


Back on the 25 May, healthcare company Medtronic Plc (MDT US) announced it had entered into a set of definitive agreements to acquire EOFlow (294090 KS).
Via a three-step process - SPAs, issuance of new shares, and a Tender Offer - Medtronic will seek majority control, together with a view to delisting EOFlow.
Completion is expected in 4Q23. Regulatory approvals -  domestic and foreign - form part of the conditions. Trading wide to terms. 


Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a> reported 6% YoY revenue growth to $8.5B, ahead of expectations, driven by procedure volume recovery, supply improvements, and innovative product introductions.</li>
<li>Medtronic intends to acquire Korea-based <a href="https://www.smartkarma.com/entities/eoflow-co-ltd" target="_blank" data-smartkarma-citation="entities:36100:1" rel="noopener">Eoflow (294090 KS)</a>, manufacturer of a tubeless, wearable, full-disposable insulin delivery device, for $738M. The transaction is expected to close in 2H23.  </li>
<li>Medtronic guided for FY24 adjusted EPS of $5.00–5.10, including ~6% unfavorable impact from Fx. The company forecasts 4.0–4.5% organic revenue growth in FY24, accelerating from 2.1% in FY23.</li>
</ul>



Medtronic Plc (MDT US) reported 6% YoY revenue growth to $8.5B, ahead of expectations, driven by procedure volume recovery, supply improvements, and innovative product introductions.
Medtronic intends to acquire Korea-based Eoflow (294090 KS), manufacturer of a tubeless, wearable, full-disposable insulin delivery device, for $738M. The transaction is expected to close in 2H23.  
Medtronic guided for FY24 adjusted EPS of $5.00–5.10, including ~6% unfavorable impact from Fx. The company forecasts 4.0–4.5% organic revenue growth in FY24, accelerating from 2.1% in FY23.


Medtronic Plc (MDT US): Strong Q4 Result; New Acquisition Announced; Fx Headwind to Impact FY24

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>In this insight, we provide the details of Medtronic's M&amp;A and tender offer for Eoflow. </li>
<li>Currently, Eoflow is trading at 28,050 won which is 6.5% lower than the tender offer price of 30,000 won.</li>
<li>Eoflow's share price is currently comfortably below 30,000 won and we believe this deal has 95-98%+ probability of getting completed within the current M&amp;A framework.</li>
</ul>


In this insight, we provide the details of Medtronic's M&amp;A and tender offer for Eoflow. 
Currently, Eoflow is trading at 28,050 won which is 6.5% lower than the tender offer price of 30,000 won.
Eoflow's share price is currently comfortably below 30,000 won and we believe this deal has 95-98%+ probability of getting completed within the current M&amp;A framework.


Medtronic's M&A, Tender Offer, and Taking Private of Eoflow

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>The likelihood of the merger review not being approved appears to be low. Additionally, the purchase of only 3.8M additional shares is required, leading to a negligible cancellation risk.</li>
<li>It is particularly noteworthy that the offering price of ₩30,000, targeting minority shareholders, may be adjusted upward depending on future share price increases.</li>
<li>While there is a potential allocation risk, as Medtronic aims to delist the company, they are unlikely to lower the target quantity in the tender offer to a risky level.</li>
</ul>


The likelihood of the merger review not being approved appears to be low. Additionally, the purchase of only 3.8M additional shares is required, leading to a negligible cancellation risk.
It is particularly noteworthy that the offering price of ₩30,000, targeting minority shareholders, may be adjusted upward depending on future share price increases.
While there is a potential allocation risk, as Medtronic aims to delist the company, they are unlikely to lower the target quantity in the tender offer to a risky level.


EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation

South Korea

Eoflow Co.,Ltd. develops and sells medical devices. The Company produces and sells wearable disposable insulin pumps and other products. Eoflow markets its products throughout Korea.

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Eoflow (294090 KS)

EOFLOW/Medtronic Tender: Risk/Reward Profile

The shares are trading wide due to key risks - regulatory approvals and the minimum acceptance condition. Low competition issues facilitate...

Arun George

Medtronic's Delisting Offer For EOFlow

EOFlow looks attractive at a gross/annualised spread of 6.2%/17.6%, assuming payment mid-October. To note, the tender offer price may still be...

David Blennerhassett

Medtronic Plc (MDT US): Strong Q4 Result; New Acquisition Announced; Fx Headwind to Impact FY24

Medtronic reported strong Q4 result, with revenue and EPS beating expectations. The company is acquiring EOFlow for $738M. FY24 EPS is guided at...

Tina Banerjee

Medtronic's M&A, Tender Offer, and Taking Private of Eoflow

Eoflow's share price is currently comfortably below 30,000 won and we believe this deal has 95-98%+ probability of getting completed within the...

Douglas Kim

EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation

This post gives comprehensive information about the tender offer to be made by Medtronic for EOFlow, including a discussion on the cancellation...

Sanghyun Park

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