Paragon Care Limited · ASX:PGC
Paragon Care — Merger or Acquisition (March 2024)
26 slides from Paragon Care's merger presentation, Mar 5, 2024
Slide 1: Proposed ParagonCare and CH2 Merger
Proposed ParagonCare and CH2 Merger Investor Presentation 5 March 2024 ParagonCare Limited - ASX PGC 1
Slide 2: Proposed Merger
John Walstab CEO and Managing Director - ParagonCare Proposed Merger 2 ParagonCare and CH2 Merger 1 Analyst consensus post IFRS forecasts; Financials include the full-year impact of the Oborne acquisition; Combined financials exclude annual synergies, transaction costs and restructuring costs
Slide 3: Proposed Merger Overview
Proposed Merger Overview Combined estimated pro-forma revenues of $3.31 billion and EBITDA of $931 million Experienced combined management team and Board to capitalise on growth opportunities A transformational merger of ParagonCare and CH2; creating a Cross-selling opportunities across both busines
Slide 4: Key Terms of the Merger
Key Terms of the Merger • Paragon Care Limited (ParagonCare) entered a Share Sale Agreement with the owners of CH2 Holdings Pty Ltd (CH2), under which ParagonCare is proposing to acquire 100% of the shares in CH2 in exchange for the CH2 shareholders being issued new shares in ParagonCare (Merger) Me
Slide 5: Combined Asia Pacific Reach
Combined Asia Pacific Reach • Broad combined geographical reach – Australia – New Zealand – Korea – Philippines – Japan – Thailand – Vietnam – China • Strong presence in Asia Pacific – opportunity for organic growth with CH2 – better value proposition for suppliers – increasing efficiency – planned
Slide 6: Combined Market Potential
Combined Market Potential Aged Care Hospital Supply Community Contract Complementary Pharmacy Logistics Medicine Primary Care Diagnostic Consumables, Complementary Contract Pharmacy Devices, Equipment Diagnostics Pharmacy Medicines Logistics Service Hospital Service & Capital & Pharmaceutical Techno
Slide 7: Combined Financial Strength and Synergies
Combined Financial Strength and Synergies • 24 distribution centers with 67,577 sqm of capacity – reduction in locations Network • Rationalisation of logistics across Australia Optimisation • Utilise cross functional resources and Shared • ParagonCare is upgrading its Mt Waverly facility to expand I
Slide 8: Merger Rationale
Merger Rationale There is compelling strategic & financial rationale supporting the ParagonCare & CH2 merger. The combined business will be a more diversified healthcare distributor in ANZ & Asia and provide an enhanced platform for organic & acquisitive growth. • A combined ParagonCare and CH2 woul
Slide 9: ParagonCare and CH2 Combined Financials
ParagonCare and CH2 Combined Financials 9 ParagonCare and CH2 Merger
Slide 10: Transaction Metrics
Transaction Metrics 2024 FY Financials ParagonCare CH2 Combined Revenue 328m 2,974m 3,302m Commentary EBITDA 39.1m 53.7m 92.8m • Borrowing facilities in place with NAB, HSBC, and Scottish EBIT 29.0m 40.2m 69.2m Pacific are expected to continue. These are to be reviewed post-Merger. Normalised NPAT 1
Slide 11: Proforma Balance Sheet
Proforma Balance Sheet Pro Forma Balance sheet As at 31 December 2023 Commentary Paragon CH2 Consolidated Proforma • Total equity will increase to $452.5 million as a result of $m $m $m issuing new shares to fund the acquisition. The associated Cash 28.4 1.2 29.5 acquisition of CH2 increases the net
Slide 12: CH2 Overview
David Collins CEO and Managing Director - CH2 CH2 Overview 12 ParagonCare and CH2 Merger
Slide 13: About CH2
About CH2 CH2 is Australia’s leading national integrated pharmaceutical, nutritional, medical consumables and complementary medicines provider CH2 has an 85-year history of providing innovative supply chain solutions to the Australian healthcare industry. CH2 has built long-standing relationships wi
Slide 14: CH2 Financial Performance
CH2 Financial Performance Revenue and EBITDA (post-IFRS 16) have grown at a CAGR of ~22.4% and Revenue ($m) ~30.8%, respectively, from FY21-FY24 .4% CAGR: 22 Profit and loss 12 months ended, 30 June 2,974 $m FY21A FY22A FY23A FY24F(1) 2,194 1,620 1,712 Revenue 1,620 1,712 2,194 2,974 growth (%) – 5.
Slide 15: CH2 Board of Directors
CH2 Board of Directors David Collins Carmen Riley Peter Lacaze Group Managing Director Chief Operating Officer Non-Executive Chairman David Collins has been involved in Carmen Riley has been with CH2 for Peter Lacaze is the Chairman and 50% the Healthcare industry for more over 12 years and has a pr
Slide 16: CH2 Timeline
CH2 Timeline 2021-Now A Proud 85-year Heritage Completion of AWMS in 2019-2020 Brisbane, Melbourne, Sydney and Perth 2017-2018 CH2 divests Animal Health CH2 achieves phase 1 of business to focus on human 123 Strategy, with $2bn in 2015-2016 health annual revenue CH2 appointed as CSO Pre-2015 distrib
Slide 17: Business Model and Portfolio
Business Model and Portfolio HOSPITAL RETAIL AGED & COM M UNITY PRIM ARY PRIVATE HOSPITAL COM PLEM ENTARY CONTRACT PHARM ACY PHARM ACY CARE CARE LABEL MEDICAL MEDICINES LOGISTICS MARKET SIZE: $6.3B MARKET SIZE: $17.8B MARKET SIZE: $0.75B MARKET SIZE: $ 0 . 4 B MARKET SIZE: $ 5 B MARKET SIZE: $ 5 B M
Slide 18: ParagonCare Overview
John Walstab CEO and Managing Director ParagonCare Overview 18 ParagonCare and CH2 Merger
Slide 19: Distribution Manufacturing Corporate Services
Existing ParagonCare Brands • Established • Established 2008 in Australia Distribution 2008 in Australia • Medical Equipment Distribution & • Medical Equipment Manufacturing Distribution • & Manufacturing Operating across Eye Care, Manufacturing Orthopaedics, Surgical, • Operating across Eye Care, N
Slide 20: ParagonCare Financial Performance
ParagonCare Financial Performance Revenue and EBITDA have grown at CAGR of ~11.7% and ~15.9% from FY21-FY24 Revenue ($m) CAGR: 11.7% 307.6 328.3 Profit and loss 12 months ended, 30 June (4) 235.8 237.6 $m FY21A FY22A FY23A FY24F Revenue 235.8 237.6 307.6 328.3 growth (%) – 0.8% 29.5% 6.7% (1) EBITDA
Slide 21: A Comprehensive Distribution Solution for Global Suppliers (OEMs)
A Comprehensive Distribution Solution for Global Suppliers (OEMs) Customer Portfolio Addressing challenges for global suppliers • Local Market Knowledge Institutions • Business Scale Differences • Public / Private Hospitals • Transparency & Trust • Laboratories • Regulatory Complexity / Compliance •
Slide 22: Asia Pacific Reach
Asia Pacific Reach • Broad Geographical reach – Australia – New Zealand – Korea – Philippines – Japan 625 – Vietnam – Thailand – China employees • Strong presence in Asia Pacific ASIA – organic growth 180 – better value proposition for suppliers – increasing efficiency AUS 384 • Further expansion in
Slide 23: Tier ONE Distribution Partnerships
Tier ONE Distribution Partnerships Aesthetics Quality Supplier Relationships Mobile MRI – Extended revenue life – Broad product range – Ability to scale DR X-Ray Ultrasound CyberKnife & TomoTherapy PET Cyclotrons 23 ParagonCare and CH2 Merger PET/CT & MRI
Slide 24: HY24 Divisional Breakdown
HY24 Divisional Breakdown Revenue1 EBITDA2 • Increased revenue HY24 $50.4m • Stronger sales across multiple specialties as our revised portfolio builds momentum. Capital & • Strong bounce back in performance in New Zealand. $50.4m $6.4m Consumables • Increased revenue HY24 $54.8m Revenue1 EBITDA2 •
Slide 25: Disclaimer
Disclaimer Summary information This Presentation contains summary information about Paragon Care and its activities current as at 01/03/2024. The information in the Presentation is of a general nature and does not purport to be complete or comprise all information which a shareholder or potential in
Slide 26: Thank you
Thank you 26 ParagonCare and CH2 Merger