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>On 17 June, <a href="https://www.smartkarma.com/entities/capitol-health-ltd" target="_blank" data-smartkarma-citation="entities:14504:1" rel="noopener">Capitol Health (CAJ AU)</a> disclosed a non-binding merger proposal from <a href="https://www.smartkarma.com/entities/integral-diagnostics-ltd" target="_blank" data-smartkarma-citation="entities:24306:1" rel="noopener">Integral Diagnostics (IDX AU)</a> at 0.12849 Integral shares per Capitol share.</li>
<li>Integral has been granted a four-week exclusivity period that ends on 15 July. The transaction will require approval from the ACCC and Capitol shareholders. </li>
<li>The offer is attractive compared to historical exchange ratios, trading ranges and peer multiples. At the last close, the gross spread was 11.7%.  </li>
</ul>


On 17 June, Capitol Health (CAJ AU) disclosed a non-binding merger proposal from Integral Diagnostics (IDX AU) at 0.12849 Integral shares per Capitol share.
Integral has been granted a four-week exclusivity period that ends on 15 July. The transaction will require approval from the ACCC and Capitol shareholders. 
The offer is attractive compared to historical exchange ratios, trading ranges and peer multiples. At the last close, the gross spread was 11.7%.  


Capitol Health (CAJ AU): All-Scrip Non-Binding Merger with Integral Diagnostics

<ul>
<li>
<a href="https://www.smartkarma.com/entities/silk-laser-australia-ltd" target="_blank" data-smartkarma-citation="entities:33498:1" rel="noopener">Silk Laser Australia (SLA AU)</a>'s binding offer from <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a> is at A$3.35 per share which is in line with <a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)</a>’s non-binding proposal.</li>
<li>While EC Healthcare is a relative minnow, it secured HK$1 billion (A$191 million) financing in May, which suggests a chance of returning with a higher offer. </li>
<li>If EC Healthcare deployed the HK$1.0 billion loan for the acquisition, it would imply a price of A$3.60 per share, 7.6% above Wesfarmers' offer.  </li>
</ul>



Silk Laser Australia (SLA AU)'s binding offer from Wesfarmers Ltd (WES AU) is at A$3.35 per share which is in line with EC Healthcare (2138 HK)’s non-binding proposal.
While EC Healthcare is a relative minnow, it secured HK$1 billion (A$191 million) financing in May, which suggests a chance of returning with a higher offer. 
If EC Healthcare deployed the HK$1.0 billion loan for the acquisition, it would imply a price of A$3.60 per share, 7.6% above Wesfarmers' offer.  


Silk Laser Australia (SLA AU): Wesfarmers Binding Offer, Next Move EC Healthcare

<ul>
<li>
<a href="https://www.smartkarma.com/entities/silk-laser-australia-ltd" target="_blank" data-smartkarma-citation="entities:33498:1" rel="noopener">Silk Laser Australia (SLA AU)</a> disclosed a non-binding indicative offer from <a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)</a> at A$3.35 per share, a 6.3% premium to <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a>’s offer of A$3.15.</li>
<li>The Board has concluded that EC Healthcare’s offer is superior. Wesfarmers has matching rights which expire on 30 May. </li>
<li>Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a modest balance sheet.</li>
</ul>



Silk Laser Australia (SLA AU) disclosed a non-binding indicative offer from EC Healthcare (2138 HK) at A$3.35 per share, a 6.3% premium to Wesfarmers Ltd (WES AU)’s offer of A$3.15.
The Board has concluded that EC Healthcare’s offer is superior. Wesfarmers has matching rights which expire on 30 May. 
Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a modest balance sheet.


Silk Laser Australia (SLA AU): David Vs Goliath Bidding Battle

<ul>
<li>
<a href="https://www.smartkarma.com/entities/australian-clinical-labs-limited" target="_blank" data-smartkarma-citation="entities:36020:1" rel="noopener">Australian Clinical Labs (ACL AU)</a> has launched an all-scrip off-market takeover offer for <a href="https://www.smartkarma.com/entities/healius-ltd-6d4d947d-ad32-4aea-b2d8-265f5768b55e" target="_blank" data-smartkarma-citation="entities:14208:1" rel="noopener">Healius (HLS AU)</a> at 0.74 ACL shares for each HLS share.</li>
<li>The offer is saddled with several onerous conditions which disproportionately shift the risk to HLS shareholders. The offer is long-dated as ACCC approval is expected to take six months.</li>
<li>The lack of premium and unattractive deal metrics suggests a high probability of Board rejection. Nevertheless, ACL’s bid underscores HLS’s beaten-down valuation. Expect improved terms.</li>
</ul>



Australian Clinical Labs (ACL AU) has launched an all-scrip off-market takeover offer for Healius (HLS AU) at 0.74 ACL shares for each HLS share.
The offer is saddled with several onerous conditions which disproportionately shift the risk to HLS shareholders. The offer is long-dated as ACCC approval is expected to take six months.
The lack of premium and unattractive deal metrics suggests a high probability of Board rejection. Nevertheless, ACL’s bid underscores HLS’s beaten-down valuation. Expect improved terms.


Healius (HLS AU): Australian Clinical Labs (ACL AU)’s Nil-Premium Merger Needs a Rethink

Global Healthcare Analyst

Tina Banerjee

Thematic (Sector/Industry)

<ul>
<li>S&amp;P/ASX 200 gained 14% during 2021, higher than other developed markets in Asia-Pacific. Many healthcare stocks remained resilient to the resurgence of the COVID-19 pandemic and outperformed the broader market.</li>
<li>Despite the recent surge, Australia’s total infection and deaths numbers are lower than many comparable countries. Australian government has so far ruled out the possibility of lock down.</li>
<li>In this insight, we have discussed five high growth ideas, with attractive business model and strong growth opportunities. Despite Omicron, these stocks are expected to continue their strong performance.</li>
</ul>


S&amp;P/ASX 200 gained 14% during 2021, higher than other developed markets in Asia-Pacific. Many healthcare stocks remained resilient to the resurgence of the COVID-19 pandemic and outperformed the broader market.
Despite the recent surge, Australia’s total infection and deaths numbers are lower than many comparable countries. Australian government has so far ruled out the possibility of lock down.
In this insight, we have discussed five high growth ideas, with attractive business model and strong growth opportunities. Despite Omicron, these stocks are expected to continue their strong performance.


Australian Healthcare: High Growth Ideas for 2022

Australia

Paragon Care Ltd. is a medical equipment company. The Company provides medical equipment and consumables to the healthcare market. Paragon Care provides medical equipment to customers in Aged Care, Hospital and Acute Care, Primary Care, Ophthalmic/Optometry, Medical Aesthetics, and Materials Handling.

Estia Health Limited provides aged care services. The Company operates a network of retirement homes, providing housing, nursing, food preparation, community building, and related services. Estia Health serves residents throughout Victoria, Australia.

Pacific Smiles Group Limited owns and operates dental centers. The Company's centers provide preventative care, diagnosis and treatment for patients with a broad range of dental care requirements.

Capitol Health Limited is mainly focus in the diagnostic imaging business through radiology clinics in Australia. It has previously provided dental surgeries and facilities to self employed dentists who carry on their own dental practices. The Company had also provided administration and management services.

Apiam Animal Health Limited operates as a veterinary practice and products supplier. The Company practices across the pig, dairy, feedlot, sheep, equine, and companion animal sectors. Apiam Animal Health has headquarters in Australia.

Asian American Medical Group Ltd operates centers that provide treatment for liver diseases in adults and children.

ICSGlobal Limited provides a variety of IT and Internet related consulting services to corporations and government clients in over 30 countries.  The Group supplies its services to a number of industries, including those covering the manufacturing, aviation, banking, property, health, retail, transportation, mining and media sectors.

Regis Healthcare Limited is a treatment program that offers Family Therapy, Clinical Psychology, Education and Occupational Therapy.

Anteris Technologies Ltd manufactures medical devices. The Company designs and develops cardiovocal equipment such as heart valve. Anteris Technologies serves customers in Australia.

Volpara Health Technologies Limited develops and markets solutions for breast cancer detection and diagnosis. The Company offers a platform technology to convert digital breast mammogram into quantitative numbers in which the actual breast tissue properties are characterized and differentiated. Volpara Health Technologies serves the healthcare sector globally.

ModivCare Inc. operates as a technology-enabled healthcare services company. The Company provides a suite of integrated supportive care solutions for payors and their patients. ModivCare serves patients worldwide.

Excelsior Medical Co. Ltd. wholesales medical equipment of brand names from local and foreign manufactures.  The Company also distributes air filters.

VITAL KSK HOLDINGS Inc. is a holding company and provides pharmaceutical sales. The Company manufactures and wholesales pharmaceuticals to hospitals and drugstores.  VITAL KSK HOLDINGS also provides property & casualty insurance services and elderly care services through its subsidiaries.

Cachet Pharmaceutical Co., Ltd manages pharmaceutical services, wholesale and retail businesses.  The Company also operates the logistics services related to pharmacy.

PT Enseval Putera Megatrading Tbk distributes pharmaceutical products, consumer goods, and hospital supplies and equipment.  The Company also markets and sells chemical products as raw material for the pharmaceutical, cosmetics, and food industries.

Shandong Realcan Pharmaceutical Company Limited is a pharmaceutical direct seller. The Company's main business is distributing drugs to high-end medical market, basic health care market and commercial distribution.

Shandong Realcan Pharmaceutical (002589 CH)

Arvida Group Ltd owns and operates senior care living facilities in New Zealand.

Talkmed Group Limited provides medical oncology services to patients.

Elan corporation provides nursing care service and daily living products for elderly people who stay in nursing-care facilites.

Thyrocare Technologies Limited provides healthcare testing services. The Company offers fasting blood sugar, cancer, cardiovascular disorders, diabetes, and thyroid testing services. Thyrocare Technologies conducts its business worldwide.

Integral Diagnostics Limited provides medical diagnostics services. The Company offers pathology and molecular diagnostics, genetics testing, and basic radiology services. Integral Diagnostics operates throughout Australia.

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Integral Diagnostics (IDX AU)

Capitol Health (CAJ AU): All-Scrip Non-Binding Merger with Integral Diagnostics

The offer is attractive compared to historical exchange ratios, trading ranges and peer multiples. At the last close, the gross spread was 11.7%.

Arun George

Silk Laser Australia (SLA AU): Wesfarmers Binding Offer, Next Move EC Healthcare

While EC Healthcare is a relative minnow, it secured HK$1 billion (A$191 million) financing in May, which suggests a chance of returning with a...

Arun George

Silk Laser Australia (SLA AU): David Vs Goliath Bidding Battle

Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a...

Arun George

Healius (HLS AU): Australian Clinical Labs (ACL AU)’s Nil-Premium Merger Needs a Rethink

ACL’s pitch to HLS shareholders is that we will create better value than current management if you accept our unattractive terms. Fairer terms will...

Arun George

Australian Healthcare: High Growth Ideas for 2022

Australian equity market is expected to continue its superior performance in 2022. This insight has highlighted five high growth healthcare ideas,...

Tina Banerjee

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