Paragon Care

[jerez1]

Adquieren Rem Systems, sube un 4%

Should you buy Paragon Care Ltd. (ASX:PGC) after its acquisition spree?
Tommaso Autorino | June 8, 2018 | More on: PGC

Shares in Paragon Care Ltd (ASX: PGC) rose 3% to $0.84c on Friday morning’s trade, after the company announced the acquisition of New Zealand-based healthcare business REM Systems for a net enterprise value of NZ$54 million (about $50 million).
The details of the transaction
Paragon will settle 80% of the purchase in cash and the rest through the issuance of 12.7 million shares at the 30-day volume-weighted average price of $0.76c. In addition, the deal includes earn-out provision of 4.5 times FY20 and FY21 incremental EBITDA from the acquisition. REM’s vendors and executive management will stay with the business throughout the earn-out period.
REM has a forecast FY18 revenue base of NZ$68 million and EBITDA of NZ$7 million.
Funding for the transaction derives partly from Paragon’s recent $70 million capital raising and partly from an increased debt facility with National Australia Bank (ASX: NAB). Paragon’s net debt to EBITDA ratio is expected to be between 2x and 2.5x following the acquisition.
Strategic rationale
Paragon’s Chairman, Shane Tanner, described REM as a “near perfect strategic fit”.
Through a series of acquisitions of suppliers of the healthcare sector – seven in the last four months –Paragon has grown to become an integrated healthcare equipment and services provider for acute, aged and primary care in Australia and New Zealand.
The acquisition of REM is particularly significant given the size of the target – in comparison with Paragon’s market capitalisation of $230 million – and the fact that REM itself is a diversified medical distribution company supplying 4,000 customers including acute care hospitals, day surgeries, medical practices and veterinary clinics throughout New Zealand and Australia, with an articulate structure that resembles Paragon’s.
Despite its strong organic growth – in the range of 6% to 8% per annum over recent years, according to Paragon’s announcement – REM is still a family run business
The acquisition is anticipated to be in excess of 10% EPS accretive in FY19 and beyond.
Foolish takeaway
I’m usually quite wary of growth built on an acquisition spree, but in this case I think the move makes perfect sense, given the homogeneity between Paragon and REM.
Based on the company’s forecast, the stock trades at just 11x FY18 earnings. With this valuation, I think Paragon is a good option to gain exposure to the healthcare sector, which is poised to grow in coming years as the Australian population ages.
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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended Paragon Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

2,3% arriba. Es una buena adquisición

[jerez1]

2,3% arriba. Es una buena adquisición

Análisis técnico

https://es.investing.com/equities/paragon-care-ltd-technical

[jerez1]

Análisis técnico

https://es.investing.com/equities/pa...-ltd-technical

Han pagado una empresa China un paquete de acciones a 91c, está con descuento del 17% y futuro por delante en crecimiento


Why Paragon Care Ltd. surged after announcing a large capital raising
Brendon Lau | August 27, 2018 | More on: HSO PGC RHC


It defies conventional wisdom but hospital equipment supplier Paragon Care Ltd. (ASX: PGC) has surged ahead after announcing a $45 million capital raising at the same time as it handed in its earnings report card.

The share price of the hospital equipment supplier surged over 10% at the opening bell before giving up half of its gain to trade 5.4% higher at 82 cents.

That’s still a good outcome as most other companies doing a capital raise typically see their shares come under pressure as new shares are almost always offered at a discount to the current value.

The difference here is that Paragon has done the opposite and completed the share placement at a big premium to its market value. Hong-Kong listed China Pioneer Pharma Holdings Limited has agreed to buy 50.4 million new shares in the ASX company at a price of 91 cents a pop.

That’s a 17% premium to Paragon’s last traded price on Friday and is quite a coup for management. It shows that the new investor is very confident that the stock is under-priced or it wouldn’t have coughed up to purchase 15% of the company.

I am not surprised to see the stock pull back from the morning peak and I suspect we won’t see Paragon trade above 91 cents in the near-term even as management posted a 17% increase in full year revenue to $136.7 million and a 6% improvement in earnings before interest, tax, depreciation and amortisation (EBITDA) to $18.2 million for the period ended June 30, 2018.

It is a good result but I think it misses the mark on a few fronts. While group earnings are up, its earnings per share (EPS) have fallen 13% to 5.4 cents due to recent acquisitions. This is a little below consensus data on Reuters.

There are also signs of cost pressures building. While gross margin is up 1 percentage point to 40%, EBITDA margin is down even if you discounted the impact of acquisitions.

Some may also question the synergies that China Pioneer can bring to the table outside of capital. China Pioneer is also a supplier of hospital equipment but to the Chinese market. The idea is that there could be cross-selling opportunities between the two entities (I suspect more so Paragon selling product into China through its new investor).

That makes strategic sense but some might argue that distribution partners don’t usually take a stake (and such a large one at that) in each other.

What probably persuaded Paragon is that China Pioneer was willing to offer so much and at such a big premium.

Paragon is a prolific buyer of businesses and it will use the cash injection to fund two potential acquisitions. The company has not released any details on the buyouts as it hasn’t signed any binding agreements.

I would normally be nervous about companies doing acquisitions, particularly at such a pace, although Paragon has a good track record on this front – at least so far.

In my view, the stock is a better way to gain exposure to the hospital industry instead of Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) and Healthscope Ltd (ASX: HSO) who are impacted by the drop in private patients.

Paragon is also trading on a more attractive valuation, although the stock will probably struggle to trade much higher until management releases details on the two latest potential acquisitions.

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Motley Fool contributor Brendon Lau owns shares of Paragon Care Limited. The Motley Fool Australia has recommended Paragon Care Limited and Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Why Paragon Care Ltd. surged after announcing a large capital raising | Motley Fool Australia

[jerez1]

Han pagado una empresa China un paquete de acciones a 91c, está con descuento del 17% y futuro por delante en crecimiento


Why Paragon Care Ltd. surged after announcing a large capital raising
Brendon Lau | August 27, 2018 | More on: HSO PGC RHC


It defies conventional wisdom but hospital equipment supplier Paragon Care Ltd. (ASX: PGC) has surged ahead after announcing a $45 million capital raising at the same time as it handed in its earnings report card.

The share price of the hospital equipment supplier surged over 10% at the opening bell before giving up half of its gain to trade 5.4% higher at 82 cents.

That’s still a good outcome as most other companies doing a capital raise typically see their shares come under pressure as new shares are almost always offered at a discount to the current value.

The difference here is that Paragon has done the opposite and completed the share placement at a big premium to its market value. Hong-Kong listed China Pioneer Pharma Holdings Limited has agreed to buy 50.4 million new shares in the ASX company at a price of 91 cents a pop.

That’s a 17% premium to Paragon’s last traded price on Friday and is quite a coup for management. It shows that the new investor is very confident that the stock is under-priced or it wouldn’t have coughed up to purchase 15% of the company.

I am not surprised to see the stock pull back from the morning peak and I suspect we won’t see Paragon trade above 91 cents in the near-term even as management posted a 17% increase in full year revenue to $136.7 million and a 6% improvement in earnings before interest, tax, depreciation and amortisation (EBITDA) to $18.2 million for the period ended June 30, 2018.

It is a good result but I think it misses the mark on a few fronts. While group earnings are up, its earnings per share (EPS) have fallen 13% to 5.4 cents due to recent acquisitions. This is a little below consensus data on Reuters.

There are also signs of cost pressures building. While gross margin is up 1 percentage point to 40%, EBITDA margin is down even if you discounted the impact of acquisitions.

Some may also question the synergies that China Pioneer can bring to the table outside of capital. China Pioneer is also a supplier of hospital equipment but to the Chinese market. The idea is that there could be cross-selling opportunities between the two entities (I suspect more so Paragon selling product into China through its new investor).

That makes strategic sense but some might argue that distribution partners don’t usually take a stake (and such a large one at that) in each other.

What probably persuaded Paragon is that China Pioneer was willing to offer so much and at such a big premium.

Paragon is a prolific buyer of businesses and it will use the cash injection to fund two potential acquisitions. The company has not released any details on the buyouts as it hasn’t signed any binding agreements.

I would normally be nervous about companies doing acquisitions, particularly at such a pace, although Paragon has a good track record on this front – at least so far.

In my view, the stock is a better way to gain exposure to the hospital industry instead of Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) and Healthscope Ltd (ASX: HSO) who are impacted by the drop in private patients.

Paragon is also trading on a more attractive valuation, although the stock will probably struggle to trade much higher until management releases details on the two latest potential acquisitions.

ASX Tech Share - Real Winner from the World Cup

Earlier this year, millions of Australians set alarms and watched the world's biggest sporting event, the World Cup, play out. But did you know there was another Australian representative quietly succeeding as the world watched?

It's the start-up who have positioned themselves as the global leader in sports analytics. Motley Fool's resident tech expert has already upgraded the recommendation of this company's stock to a rating of simply "Buy More".

Click here to access this share. It's completely FREE!

Motley Fool contributor Brendon Lau owns shares of Paragon Care Limited. The Motley Fool Australia has recommended Paragon Care Limited and Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!
Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

Why Paragon Care Ltd. surged after announcing a large capital raising | Motley Fool Australia

https://www.acbr.com.au/china-pioneers-45m-charge-australian-healthcare