IFT - Infratil

**X-men** · 29-04-2021, 02:14 PM

Reconk the next takeover price will be at least $8 in the front?

**maclir** · 29-04-2021, 02:34 PM

From the announcement "Enterprise Value of NZ$867 million implies an EV/EBITDA multiple of 12.6-13.3x". There are 46 clinics, so an average "value" of $19m per clinic, not sure how many radiologists there are per clinic. This compares with a "value" per clinic for QScan of $11m. The interesting thing for me is the growth in revenue expected through these clinics, funded through government subsidy and medical insurance. Socialised medicine providing opportunities for capitalists!

**lissica** · 30-04-2021, 10:12 AM

Originally Posted by Jaa

So a radiologist is worth almost $10m each?

Looking at the share register, looks like most radiologists own either 1% or 2% shares.

Still a pretty tidy sum. I wonder what they paid to buy in?

**macduffy** · 30-04-2021, 10:37 AM

Originally Posted by lissica

Looking at the share register, looks like most radiologists own either 1% or 2% shares.

Still a pretty tidy sum. I wonder what they paid to buy in?

Are we talking radiologists' shareholdings? Or the price that IFT is paying per "working radiologist" ? I thought it was the latter.

**lissica** · 30-04-2021, 11:05 AM

Originally Posted by macduffy

Are we talking radiologists' shareholdings? Or the price that IFT is paying per "working radiologist" ? I thought it was the latter.

I was talking shareholdings. After all, you don't value a business by the number of staff that work there.

There are also radiographers and admin.

**macduffy** · 30-04-2021, 02:14 PM

Originally Posted by lissica

I was talking shareholdings. After all, you don't value a business by the number of staff that work there.

There are also radiographers and admin.

No, but the cost per radiologist's output/revenue contribution might be a useful check against overpaying for the asset.

**Jaa** · 30-04-2021, 03:55 PM

Originally Posted by macduffy

Are we talking radiologists' shareholdings? Or the price that IFT is paying per "working radiologist" ? I thought it was the latter.

I was talking about the cost per working radiologist of which Infratil said there were 90. With an enterprise value of $867m seems like an incredible price to pay to me. I am sure there are other staff, expensive equipment and government contracts but these can move over time or become obsolete.

Lissica's point is valid too, what's to stop a number of those radiologists that had 1-2% shareholdings leaving and investing their proceeds in founding a competitor?

**maclir** · 30-04-2021, 04:25 PM

Lissica's point is valid too, what's to stop a number of those radiologists that had 1-2% shareholdings leaving and investing their proceeds in founding a competitor?

Scale. Their retention of 40% shareholding - IFT's track record promises future rewards. Possibly non-compete.

**lissica** · 30-04-2021, 05:59 PM

Originally Posted by Jaa

I was talking about the cost per working radiologist of which Infratil said there were 90.

The majority of their staff would be radiographers/sonographers.

Originally Posted by Jaa

With an enterprise value of $867m seems like an incredible price to pay to me. I am sure there are other staff, expensive equipment and government contracts but these can move over time or become obsolete.

Lissica's point is valid too, what's to stop a number of those radiologists that had 1-2% shareholdings leaving and investing their proceeds in founding a competitor?

Likely will be non-competition clauses, and also the minority stake as disincentive. They also have a pretty wide footprint- so easiest to refer to for convenience.