@All - Here is a breakdown half-by-half over the past three...

@All - Here is a breakdown half-by-half over the past three years. I won’t comment too much on it, except to note the second half of the year was particularly strong in terms of sales and wasn’t that far behind the first half (historically a gap of ~$500K). The best year remains FY2015 when the AUD was a lot stronger against the USD, which helped to improve gross margins.



@spartacus - Can see some confusion on what is needed to pass. The way SIAs are structured small shareholders do also get a say in the outcome. To flush this out a little -
(1) 75% by value - means the number of shares voted in favour must be >= 75%. This will largely be determined by the entities with large shareholdings in the company.
(2) 50% by number - means that a simple majority of shareholders who turn up to the scheme meeting on Nov 15 vote in favour. That is, at the meeting a person who holds one share ranks equally as one who holds one million.

@All - I’ve been in touch with the company and confirmed Mrs B’s CareFusion numbers in a previous thread were, if anything, conservative. The company had apparently done a lot of work in reducing manufacturing costs in the CareFusion OEM business and it wasn’t a low margin business. Everything else being equal the FY2017 result would have been a loss of ~$250K without CareFusion (my estimate).

There is a tough decision to be made. These are some factors that need to be weighed up -
(1) The 8.6c price being offered is the highest stock price the company has seen since June 2015 and is all cash
(2) The 30% price premium is in the ballpark of other SIAs (see other thread for further analysis on this)
(3) Had the full impact of CareFusion and its impact on sales/profit been known by the market then the share price may have been lower than 6.6c prior to the SIA being announced. In others words a 30% premium on a lower share price would be less than 8.6c.
(4) In the July-Sep period the AUD-USD exchange rate average was 79c, which will boost gross margins for FY2018.
(5) ICU Medical stand to extract synergies estimated to be a minimum of $375K plus any headcount reductions. The $375K figure is comprised of dissolving the MLA board ($126K), closing the MLA office and moving to ICU headquarters ($225K) and no more ASX listing fees ($25K)
(6) What is road ahead if the offer is rejected?
(7) Does the offer reflect the true value of the company? Personally I believe the true value of the company to be higher than 8.6c (it’s a bargain at anything under 10c IMHO)

For me, the key consideration is the alternate future if the offer is rejected. Is there a combination of organic growth, capital raisings and acquisitions that could attract new investors and raise in the share price? What will be the AUD-USD exchange rate in the months and years ahead (which has a big bearing on profitability)? Can the company become more investor friendly and improve their investor marketing?

Using the crystal ball, if the SIA is rejected I suspect the share price will remain lower than 8.6c in the short term to medium term. Consequently my thinking is a “yes” to the SIA for a short to medium investment horizon ( < 2 years) and a “no” vote for an investment horizon over the medium to long term (> 2 years).