Inside the pathology love triangle
Money Magazine Australia|May 2023
The ACL-Healius merger may or may not go ahead, but either way the future looks bright for Sonic, the third party in this affair
GRAHAM WITCOMB
Inside the pathology love triangle

They say falling in love is often a matter of “falling upwards” – desiring a partner with slightly better prospects than yourself.

That’s certainly true of the proposal by Australian Clinical Labs (ASX: ACL) to merge with Healius, a company almost twice its size.

ACL has proposed an off-market takeover, whereby Healius shareholders would receive 0.74 ACL shares for every Healius share. No cash would change hands. In effect, Healius shareholders would own 68% of the combined entity, with ACL shareholders owning the remainder.

The merger is a slam dunk from a strategic standpoint. Healius has a 32% share of Australia’s pathology industry, while ACL holds 17%; the merged entity would have a 49% share by revenue and operate more than half the collection centres. That would top Sonic Healthcare’s 42% market share and knock the current leader to second place in the pecking order.

Combined, ACL-Healius’s size would give it an edge when bidding for large tenders, and ACL’s management believes a merger would enable around $95 million of cost cuts and efficiency improvements.

That figure doesn’t seem stretched – around $26 million of savings are expected to come from improved purchasing of consumables, or roughly 5% of the combined companies’ consumable expenses, which is manageable.

What’s more, around 70% of ACL’s collection centre footprint is split between NSW and Victoria, the two states where Healius dominates. That lends itself to Healius’s “hub and spoke” model of plugging in more collection centres to its central labs and cutting duplicate costs. Higher efficiency is a sure thing.

Bu hikaye Money Magazine Australia dergisinin May 2023 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

Bu hikaye Money Magazine Australia dergisinin May 2023 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MONEY MAGAZINE AUSTRALIA DERGISINDEN DAHA FAZLA HIKAYETümünü görüntüle
An outrageous, beautiful monopoly
Money Magazine Australia

An outrageous, beautiful monopoly

Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.

time-read
4 dak  |
July 2024
Drop the anchor to judge value
Money Magazine Australia

Drop the anchor to judge value

Buying and selling decisions should be based on where a stock price is going, not where it has been.

time-read
3 dak  |
July 2024
Powering the AI boom
Money Magazine Australia

Powering the AI boom

Beyond the software and chipmakers, where will the energy come from?

time-read
3 dak  |
July 2024
Get into life
Money Magazine Australia

Get into life

Tucked inside super are products that can protect you from life's inevitable uncertainties.

time-read
5 dak  |
July 2024
Paths to home ownership
Money Magazine Australia

Paths to home ownership

Taking the road less travelled can sometimes deliver unexpected benefits.

time-read
5 dak  |
July 2024
Sold! Quick ways to add value
Money Magazine Australia

Sold! Quick ways to add value

Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.

time-read
5 dak  |
July 2024
Money lessons the kids need to know
Money Magazine Australia

Money lessons the kids need to know

Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.

time-read
4 dak  |
July 2024
Property-investing rules: are they likely to change?
Money Magazine Australia

Property-investing rules: are they likely to change?

The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.

time-read
3 dak  |
July 2024
What's love got to do with it?
Money Magazine Australia

What's love got to do with it?

A rollercoaster of emotions could be driving poor crypto behaviour.

time-read
3 dak  |
July 2024
Are we ready to be cash-free?
Money Magazine Australia

Are we ready to be cash-free?

Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.

time-read
2 dak  |
July 2024