Well here is one take that no-one has commented on. There have been posts saying the CR raising costs are high. I think they may have a bit of cost in there but the fact is that how bad would management have looked had they got to the end of say February and the whole aspect of capital markets had changed and they needed to raise the huge amount (relative to their market cap) then. If they could not get it over the line then they would not have been able to continue to pursue these acquisitions and in fact, would have a lot of wasted costs to absorb.
They have a fully underwritten CR for all the money. They can execute their plan and we know that the balance sheet will be substantially stronger after this. I have heard rumours that in the institutional bid there has been a lot that has been scaled back and the scale back was quite significant...
Given all of this PGC post this CR is a much larger business and they locked in a lot of
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I think the timing is really crucial - getting this over the line is important... Then add to that that the last raise was @53c at that time the share price was 67c so the discount was 20.8%. This time the share is trading at 76c and they are raising @72.5c so a very small percentage. By reducing the discount on a day when the previous day the market had slumped and PGC hadn't moved ...
I just wish that some would give them credit for what they have achieved. Even in these less than bright times they have achieved a great result financially for us.
The missing link right now is the fact that we cannot see all the acquisitions especially the ones that make up the presentation... However, I think they have managed a great outcome for shareholders. Forget the fact that it's now etc etc - Just look at the numbers:
18 August 2015 raised $47 million at a 20.8% discount.
8 February 2018 raising $70 million at a maybe 5% discount.
Similarities to deals:
1. Transformational - yes its still not a done deal but look deeper do you think they would have gone this far if they could not complete? Hasn't market uncertainty made it a bit more likely to complete...
2. Net Debt to Ebitda in 2015 moved down from 2.3 to 1.7 times - in 2018 it moves down from 2.0 to 1.4 times.
3. Hard facts - Footprint increased by opening in SA.
4. 104.5 million new shares so that's an increase of 62.9% in shares but a theoretical increase in Earnings of 97.7%.
5. $6 million of shares to be issued to vendors.
6. Big play - suggests they have some cohesion in process.
7. Seems to be a first mover and the PEP deal on LHC has put healthcare back into the demand basket.
Now the risks are clear
- Can the sum of the parts be at least as good as the individual parts?
- Can Andrew Just and Mark Simari put this together?
- Can they deliver the unknown acquisitions?
- Can they integrate without getting indigestion?
- I suppose this is my need - Can we have a bit of time to digest this?
- Can this stock get rerated to go into the ASX300 and how long will that take? It's too big as it is now without more audience and in the past year, I think the audience has become a bit narrow. I generally don't like companies between $100 million and $200 million they don't have enough insto's and have too many retail investors.- Opinion...
- How does this moving target once again get explained to shareholders? I don't know how to measure results year on year. Will the market understand what is happening and will they buy into it or will it just drop into the too hard basket?
Personally, I went back to the 18 August 2015 announcement and compared that process to the announcement now. I compared the similarities and the differences. I would encourage everyone that holds to do that. In this announcement slide number 15 was interesting - the only one I never got was Midas and it still doesn't make sense to me. The only thing I wished they would have done is put rings on the slide to show relative sizes of acquisitions that would have told the story even better. That slide is now on my wall awaiting the announcements I nexpect byu end of March.
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