Healius Limited · ASX:HLS
Healius — Primary Health Care — Merger or Acquisition (February 2007)
9 slides from Healius's merger presentation, Feb 12, 2007
Slide 1: Primary Health Care Limited ASX cover note
PRIMARY HEALTH CARE LIMITED 30-38 Short Street LEICHHARDT NSW 2040 12 FEBRUARY 2007 Attached is a copy of a presentation given by Dr Edmund Bateman at BBY Limited Sydney on Monday 12 February 2007. Andrew Duff Company Secretary
Slide 2: Primary Health Care Ltd Presentation and Briefing
PRIMARY HEALTH CARE LTD PRESENTATION AND BRIEFING BBY LIMITED SYDNEY MONDAY 12 FEBRUARY 2007
Slide 3: Symbion – Primary Proposal Background
SYMBION – PRIMARY PROPOSAL BACKGROUND Over number of years: Multiple discussions Maynes/Symbion and Primary. 1 November 2006: Hard copy presentation by Symbion’s Mr. Robert Cooke (CEO) and Mr. Mark Hooper (CFO) to Primary’s Dr. Bateman (MD) and Mr. James Bateman (COO), at Carnegie Wylie’s. Early Dec
Slide 4: Synergy estimates FY08
Synergy estimates FY08 P S Pathology $26m-$37m $15m-$20m Radiology $8m-$13m $4m-$8m Technology $15m-$23m Unknown? MC’s $23m-$32m $15m-$20m Head Office $6m-$12m $6m-$12m Total $78-$130m $40m-$60m +Technology (Symbion Hardcopy Presentation, Discussion Paper pg 1)
Slide 5: Potential structures
Potential structures • Given the extent of the synergies available, bringing the businesses together is compelling • Option 1 - Merger – nil premium • Option 2 - S acquires P • Option 3 - P acquires S (Symbion Hardcopy Presentation, Discussion Paper pg 2)
Slide 6: Deal outcome – Option 1 Merger
Deal outcome – Option 1 Merger • Nil premium • Significantly accretive for both companies • Merger ratio on the 2008 EPS Accretion $130m $78m $60m basis of relative P 63% 45% 37% market caps S 35% 21% 14% • P 43% • S 57% Possible issues • Complexity • Pharmacy and Consumer business……acceptable dives
Slide 7: Deal outcome – Option 2 S acquires P
Deal outcome – Option 2 S acquires P • Assumptions - 30% takeover premium - $60m synergies ($20m cost to achieve) - 15% debt funded (maintains existing debt/EBITDA ratios) - Deal would be dilutive to S shareholders - For deal to be EPS neutral for S shareholder’s maximum price $15.30 (Symbion Hardco
Slide 8: Deal outcome – Option 3 P acquires S
Deal outcome – Option 3 P acquires S • Assumptions - $78-$130m synergies ($20m cost to achieve) - 15% debt funded (Net debt/EBITDA 3x) • FY08 deal return to P shareholders EPS accretion $78m $130m 30% premium 23% 42% 40% premium 16% 35% 50% premium 11% 28% (Symbion Hardcopy Presentation, Discussion
Slide 9: Primary – Symbion Proposal
PRIMARY – SYMBION PROPOSAL • Maximum synergistic fit. • Merger ratio market cap at time – fairest to all. • Lead managed by PRY team, and, SYB managers to optimize outcome. • Proposed due diligence and negotiations allow for adjustments. • Control (56%) to current Symbion shareholders. • SYB shareho
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