Paragon Care’s buying spree continues with ninth purchase for the year
Where there’s muck there’s brass may be medical supplier Paragon Care’s motto as it continues to hoover up industry competitors, this time a Kiwi distributor.
The latest deal brings to nine the number of companies acquired so far this year — and 17 since 2014.
It raised $69 million from investors earlier this year at 72.5c a share to fund the latest buying spree.
Paragon — which sells medical devices and consumables to healthcare providers in Australia and New Zealand — has grown by acquisition as it seeks to bulk up in a bid to improve operating efficiencies.
In the latest deal it is outlaying $NZ54 million for REM Systems, $NZ44 million in cash and the balance in shares priced at 76.5c, a slight discount to the 84c the shares were fetching this morning.
The new purchase has revenue of $NZ68 million, of which two thirds is in New Zealand and the balance in Australia.
Brokers who follow the company generally have 12 month price targets of around $1.10-20 for Paragon shares, depending on the level of debt once the present slate of acquisitions is completed.
Much of the analyst interest in Paragon resides in its Midas software system, which automates part of radiography reporting in hospitals and clinics, resulting in significant time savings.
Even though Paragon has not given a lot of detail about prospects for the software, the decision late last year by global giant Toshiba to distribute the software has helped to give it some market validity although financial details of the tie up have not been disclosed.