Note that my research suggests that Sonic will conduct approx 500k HPV tests in their labs around the globe in 2009.
With GBI profitable off these volumes alone operating leverage is high.
See how EBITDA increases by 196% (to $7.7m) on 100% volume increase from 500k tests to 1m tests pa
At 15x EBITDA = $2.25 per share value. Note that DIGENE was acquired at 47x LTM EBITDA
Hologic is currently being acquired on an even higher multiple (US$580m) prior to it getting US regulatory approval.
Long term market share at 6% of this HPV space = EBITDA of $30.2m. Note that Sonic currently hold 6% market share of the US and also 6% of Europe so assuming that GBI can do a few more deals outside of Sonic then these projecions could be very conservative in the long run
GBI Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Held
