Ann: Presentation - Capitol's Offer for Integral Diagnostics, page-38

I am no expert mate, but here are some random thoughts.

If it was to go through:
It would cost CAJ only 52 million cash, with the balance paid in shares in the new entity. This debt would also be shared with the new acquisition....
The total number of shares in the new entity would be 1.8 billion. Dilution is not really applicable as the new entity would have greater assets, ie smaller % slice for each CAJ holder but of a bigger pie.

The funds holding 20% of IDX have accepted the deal, meaning they are happy to get some cash and a bucketload of shares (roughly 200 million) in the new entity. Why? Are they confident in the new entity?

There is no doubt that the two companies would complement each other extremely well, particularly with regards to MRI licences, and mix of hospital and suburban practices. A saving in admin, consumables etc is also a given (estimated at 5 mil pa).

If you take the dividend from IDX alone last year and spread it across 1.8 billion shares it comes out at approximately 0.005638 c FF per share pa. So I don’t think a dividend is out of the question, sooner rather than later.

As usual integration will be the biggest challenge, and how that would go is very difficult to predict. Only time will tell on this one, and unfortunately this can make or break the move imo.

Enlitic deployed across all combined sites would have greater impact, than just across the CAJ sites, though I think it’s real value will be in China. Enlitic is making some appearances over the next few months overseas, starting with RSNA. Hopefully they have something worth bragging about.

Doubt IDX will simply just accept. CAJ will need another 70%, so where will this be coming from? You may remember some major IDX shareholders, including the CEO, stepped down recently. One would hope CAJ didn’t make this sort of move without move B and C already planned.

And yes @tamz it was a complete surprise to many, including no doubt, IDX management.

Well, given all the above, the China and Enlitic potential, and IDX exceeding 2.40, I decided to cash my IDX in and switch to CAJ. But for me this a long term (12 - 24 months ++, maybe even longer) play, so if CAJ drops in the short term, as it may well do as the market struggles to understand what it is trying to do, as long as CAJ keeps going as it has over the last 6 months I will probably keep adding, depending on what else is happening elsewhere of course.

Interesting times ahead over the next few weeks, that is for sure.

Good luck with whatever you decide to do.