Well done management this is a cracker announcement .... an absolute peach and pretty bloody cheap given its strategic value to VHT. Because of this I will hold my nose and look past the discount the placement is being done at, which does seem larger than it might have needed to be.
1) This will massively accelerate the sales process in both directions (very limited overlap between the existing clients of each entity) This will ensure we get the current Volpara products to 30% market share with 24 months.
2) They will be able to hit higher ARPU. The presentation now says they think up to US$10 per screening is possible for a full suite of products.
3) A combined product will me much more attractive to the overseas public screening programs .... it will be able to do everything from sending out appointment letters, through to practice management, through to image quality assessment, breast density and risk assessment through to storage and recall of data on an individual.
4) they take the first step in to lung which is something they have had in the back of their mind for sometime.
The absolute topper for the long term is page 16 of the preso. Going forward where clients are on both systems they will be able to marry up detailed clinical data and mammogram data. Even if we just look at the joint clients they will have on day one, the number of images and those repeat images over time could well lead to significantly improved predictive tests. This will take sometime but they get this right and if they can provide effective personalized predictive risk assessments then you could well be looking at 80% market share and prices of at least $25 per screening. The cost savings to the healthcare system would be huge. Nobody else will have this or anything that remotely comes close.
Final point, I reckon if we settle around the $1.60 or $1.70 mark as a minimum then we go in to the ASX300 at the next review.
