Surgical Innovations Group Plc · LSE:SUN
Surgical Innovations — Merger or Acquisition (July 2017)
15 slides from Surgical Innovations's merger presentation, July 2017
Slide 1: Proposed acquisition of Elemental Healthcare Limited
Proposed acquisition of Elemental Healthcare Limited Subscription and vendor placing July 2017
Slide 2: Disclaimer
Disclaimer • The information contained in these slides has been prepared by Surgical Innovations Group plc (the "Company") solely in connection with the proposed placing (the "Placing") of ordinary shares in the capital of the Company (the "Placing Shares") and the proposed application to the London
Slide 3: Disclaimer
Disclaimer • WH Ireland, which is regulated by the Financial Conduct Authority, is advising the Company and no one else in connection with the Placing (whether or not a recipient of the Information Materials), and will not be responsible to anyone other than the Company for providing the protections
Slide 4: Introduction
Introduction • Surgical Innovations Group plc (“SI”) is to acquire 100% of the equity of of Elemental Healthcare Limited (“Elemental”) www.elementalhealthcare.co.uk • Elemental is one of the leading suppliers of specialist high quality surgical devices to the NHS and UK private hospital groups, incl
Slide 5: Transaction overview
Transaction overview • SI to acquire 100% of equity for £9.375m (less Net Debt to be assumed at completion*) • Contracts exchanged on 27 July 2017 • Vendors will retain £1.875m of consideration in shares and join the enlarged Group board • Balance of £7.5m (plus costs) to be funded from cash resourc
Slide 6: About Elemental
About Elemental • Elemental is one of the leading UK-based specialist distributors of medical products (including laparoscopic instruments) operating from Hungerford, Berkshire • In addition to exclusive distribution of SI brand in the UK, Elemental also handles complementary laparascopic product (M
Slide 7: Benefits to SI
Benefits to SI • Profitable, cash generative successful business with strong reputation • Loyal and committed management with pedigree in medical sector • High interdependency, hence relatively easier to understand, diligence and integrate • Access to experienced UK direct sales force • Significant
Slide 8: Risk factors
Risk factors Other than the usual commercial risks associated with a transaction of this type, SI have identified the following specific factors: Risk factor DD/Mitigation Low level of asset backing – up to £9m of Key is to retain top people, as we consider goodwill on acquisition that they are the
Slide 9: Pro-Forma Income Statement
Pro-Forma Income Statement SI Elemental Integration Combined 12/2016 03/2017 Pro-Forma £m £m £m £m Revenue 6.09 6.53 (0.89) 11.73 Cost of sales (4.03) (3.76) 0.89 (6.90) Gross profit 2.06 2.77 0.00 4.83 Other operating expenses (1.59) **(1.67) 0.00 (3.26) EBITDA 1.41 1.14 0.00 2.55 Amortisation of i
Slide 10: Pro-Forma Balance Sheet
Pro-Forma Balance Sheet SI Elemental Transaction Combined 12/2016 03/2017 £m Pro-Forma £m £m £m Tangible fixed assets 1.58 0.05 1.63 Intangible assets 1.60 0.00 8.78 10.38 Total non-current assets 3.18 0.05 8.78 12.01 Inventories 1.50 0.63 2.13 Trade receivables 1.10 0.97 2.07 Other current assets 0
Slide 11: Equity investment proposition
Equity investment proposition • Total consideration represents 8.53x historic EBIT • Equity raise of £5.5m to cover balance of consideration & costs • Money raise at 3.0p (approximately 20% discount to closing on 26 July) • Represents 23.5% of enlarged entity* • Vendors accept additional £1.88m equi
Slide 12: Enlarged Group - Strategy
Enlarged Group - Strategy SI Group will comprise growing, dynamic businesses that provide innovative high- quality products, predominantly for Minimally Invasive Surgery We view ourselves as partners with our distributors, our customers, our employees and our suppliers to achieve the best patient ou
Slide 13: Enlarged Group – Growth Opportunities
Enlarged Group – Growth Opportunities Strong growth prospects Access to "on the Access to additional - Market targeted to ground" intelligence to high level commercial grow 6.5%pa till 2025 – drive development of talent to improve our combined entity aims to existing products and sales profile outsi
Slide 14: Appendix
Appendix Surgical ™S noyations
Slide 15: Management biographies
Management biographies Adam Power David Marsh Aged 53, BSc in Applied Biology (Bath) Aged 52 1986-91 Schering AG Area Manager (Africa) 1990-95 USSC (now Medtronic) 1991-98 Director Forth Medical Ltd, subsequently 1995 - 2000 – GM, Sky Medical, built small start-up acquired by MBO to form: into £3m d
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