Well good luck with smaller healthcare companies with their own...

Well good luck with smaller healthcare companies with their own IP operating from Australia - Not many actually makes it. We all know about Cochlear but that's the exception. It's like taking a lotto ticket here. Its easier to find a small segment of a USA and get to market.

However to the core of the debate. Actually, there is a very cohesive plan except for MIDAS - I don't get that but I think its the fact that the opportunity is so large that to not do it would be a waste. It's not a large amount of money.

Firstly if you had been around in 2011 the plan was being hatched and they had already paid their school fees - previously they had acquired a couple of businesses that they had had to sell back or dispose of. So they had already seen that aggregation was not an easy solution. The basics were that the supply chain was so fragmented that each state had a different representation for products and even customer profiles suggested that some products had broken into different market segments. Those small businesses were distributors representing larger and often international businesses. There were huge shifts happening technology and supply issues from China and the fact that hospitals here had huge supplier bases to supply a range and even that range changed. The issues were how to create a service standard that was similar across Australia. Then there is our high-cost of labour - So service and sales calls are an expense but there are capital equipment and consumables. as an agent the better you do your job the more you make but you also make it worthwhile for the principle to come and open their own offices.

They are not just running around adding on businesses to add to the bundle - it's not a roll-up of different car brands. Yes, there are overlaps but there is also technology solutions for hospitals in purchasing refer to Western Biomed. The capital equipment areas have a range of products and often the next target was, in fact, a company that was complementary to the business they had bought. So whilst it's not rocket science they have spent a huge amount of time developing systems that make it easier for each staff member and also for the customer. The service division that can service a very wide range of products ... The SAP Hana system that can provide a lot of information that can help with stock planning and reporting.

Then the most important the cultural fit - I know of at least two acquisitions that got very close but did not happen because of the fit.

It's easy to think just lets buy more outlets and then we make more money and the aggregation story turns into a growth story - they are not fools and have been around the block to know that the plan has to have a logic to it and must fit together. The logic is to service Australia and NZ from your own presence in each state and central place. To have a range of products that are attractive to various parts of healthcare without suggesting that one sales rep can cover all the bases - that's an order taker not a professional representative.

That the balance must make sense but at the same time to be able to offer a wider selection to a range of customers. I remember clearly the illustration around Scanmedics and how another company they acquired very often had a rep following upon the Scanmedics because the Scanmedics product needed a complimentary range of products that were consumable by nature...

Yes you are 100% correct this is an aggregation but at the heart of it its also about a natural progression towards a consolidating industry and having a balance of capital and consumable products and providing a high level of customer support as well. They used to sell a very expensive bed. That agency I think came to represent themselves in Australia so Paragon produced a range of their own beds suited for conditions here.

Perhaps the largest indicator that it's not just an aggregation story is by looking into where Mr Andrew Just has worked ... Radiometer , Stryker Cochlear and GE - I doubt he would be moving into Paragon if it didn't have a cohesive proposition for customers.

Yes, it's a broad base but no it's not a catalogue...

Anyway that's my opinion for what its worth.

By the way, the share went up to 94c in my opinion without there being hype around the sector. In February 2015 PGC was 44c and CAJ was 94c and LHC was $2.63 yes the industry was being spoken about and I think. In February 2016 PGC was 66c and CAJ had already imploded down to 14c and LHC had also dropped to $2.45. A year later early Feb PGC was around 78c, CAJ was around 28c and LHC was $2.58 before the PEP offer. The 94c was in actually Aug 2017 when CAJ was 28c and LHC was around $2.40. As far as I recall there were a lot of questions during last year around the potential changes to Medicare benefits, hospitals and the like. I think at that time we expected more of the plan to unfold and it actually did not - later we got to understand that they had been looking to transition the management and in fact, no news tends to cause drift down in my opinion at the small-cap end.

Add to that the fact that just before transition announcement Pie became a substantial holder and has, it seems, decided to sell down or out we don't know as it's dropped off the substantial holders' list. So my opinion is that PIE not being replaced has caused a bit of an overhang... Plus transition has risks - I think we are all waiting to see how it will unfold... Yes, I am more nervous than when MS was CEO as I think I understood him I don't have a feel for AJ - yet.

Bottom line this company needs larger holders than it has and getting into the ASX300 should do that for them.