Ann: SRX BOARD RECOMMENDS ACQUISITION BY VARIAN MEDICAL SYSTEMS, page-79

We have guidance of $75 to 85m, and the AFR noted marketing of about $90m. Not sure what the admin is.

Bottom line, we know the gross margin is in the 80s, so on t/o of $250, this should yield a gross of about $200m. Imo another $50-60m would be sales commissions, which probably still have to be paid. A new owner using their existing sales force, admin etc could possibly extract around $120-130m without trying too hard.

At current offer price, this would be about a 12 year payback. Of course ANY dose sales increase would start to reduce this rather quickly. A PMA for HCC, and or the RHS deal being confirmed and we could be back to 14/20% increases again in short order.

Thus my thinking is like this. If BTG or Bayor etc have run the numbers on HCC and RHS and can see dose sales escalating over the next 5/10 years then SRX is undervalued at $28. Almost any growth would be worth a premium.

It will be most interesting if over the next couple of months, Ricky Sharma gets published on the RHS,. or the NCCN change reccommendations to separate based on source. This may provide some impetus for others to act. Time is on their side.

Although I don't hold any great expectations, it would not surprise me to see a final price in the mid 30s.

In the absence of another bidder,clearly my logic is incorrect and $28 represents a good price.

Best to all holders, especially those that I have had a higher level of contact with over the past few years.
Cafa